Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Oral Answers to Questions — CULTURE, MEDIA AND SPORT

The Secretary of State was asked—

Regional Theatre

Mr. Bill Rammell: If he will make a statement on his plans to support regional theatre. [41984]

The Minister for Arts (Mr. Mark Fisher): The network of British regional theatres and touring companies is one of this country's great artistic achievements. We are determined to strengthen and develop that network.

Mr. Rammell: Under the system of theatre funding by the regional arts council, two theatres in my region are funded at the expense and to the exclusion of all the others, including the successful Playhouse in my constituency. Does my hon. Friend agree that such an unfair system of funding should cause concern? Does he further agree that regional arts councils should be charged with distributing their funds more equitably?

Mr. Fisher: My hon. Friend and the new management of the Harlow Playhouse have been having discussions

with the chief executive of the Eastern arts board. I wish them well in those discussions. My hon. Friend is right to say that the record of the Arts Council and regional arts boards in backing new companies and developments is less than inspiring—their priority has tended to be the defence and preservation of existing companies. I am confident that the new Arts Council and its chairman, Mr. Gerry Robinson, will want to take an early and positive look at that.

Mr. Robert Maclennan: The new structure of the Arts Council has led to the resignation of the entire theatre panel. How will the perceived needs of theatre in the regions be communicated to the Arts Council?

Mr. Fisher: The new chairman of the Arts Council and my right hon. Friend the Secretary of State have made it clear, in letters to the papers and in press statements, that they recognise that one of the Arts Council's great strengths lies in its professional, independent, detailed advice from specialist panels. That will continue, and my right hon. Friend's letters and statements have made it clear that that advice is valued and that the council will have access to it.

Mr. Richard Spring: What does the Minister think about the resignation of the entire drama panel of the Arts Council and the unprecedented refusal by 58 theatre directors to fill the gap—coming on top of the closure of regional theatres such as the one in Farnham, the Liverpool Playhouse and Greenwich theatre? Does he agree that that is a shocking indictment of the Government's policies, as opposed to the false impression of support that was conjured up in the Secretary of State's book?

Mr. Fisher: No, I do not. All those on the advisory group were eminent people who gave good advice, but, as I said to the right hon. Member for Caithness, Sutherland and Easter Ross (Mr. Maclennan), professional, expert advice of that quality is at the heart


of all the Arts Council's decisions. I assure Opposition Members that that specialist advice, not just in drama but in other art forms, will continue.

Art Market

Mr. Andrew Robathan: If he will make a statement on the future of the major art houses in the United Kingdom. [41986]

The Minister for Arts (Mr. Mark Fisher): The Government recognise the great contribution that the United Kingdom art market makes to the national economy. It employs some 40,000 people and has a turnover of £2.2 billion a year. The Government are determined to play their part in ensuring that the market continues to be competitive and to thrive.

Mr. Robathan: I whole-heartedly support the Minister's response. Will he undertake to defend the art market against the threat of harmonisation of VAT across the European Union? He will know that the introduction of 2.5 per cent. VAT on the sale of works of art has already seriously affected the art market in London and in the rest of Britain. If VAT is harmonised, the art market may be driven not just from Britain but from the European Union, and may go to the United States and Switzerland. Will he take action to prevent that?

Mr. Fisher: VAT is a matter for my right hon. Friend the Chancellor. The hon. Gentleman is right to say that it has caused problems for our art market, as has the possible threat of harmonising droit de suite. We have undoubtedly played a major part in trying to get a more rational debate on droit de suite in Europe. Other countries do not have such legislation and support us in being sceptical and critical of droit de suite. We continue vigorously to argue that case in the European Union.

Elgin Marbles

Mr. Gordon Prentice: Under what circumstances the Elgin marbles might be returned to Athens to mark the millennium. [41988]

The Secretary of State for Culture, Media and Sport (Mr. Chris Smith): The Government have no plans to return the Parthenon sculptures to Athens.

Hon. Members: Hear, hear.

Mr. Prentice: I suspect that I may not have the House with me on this matter, Madam Speaker.
Thirteen years ago, the then leader of the Labour party, Neil Kinnock, said that the Parthenon without the marbles was like a smile missing a tooth, and pledged to return the frieze to Greece. If the case was so compelling 13 years ago, why is it not equally compelling now?

Mr. Smith: Although I sympathise with my hon. Friend's view, we have had time over the intervening 13 years to reflect on the matter, and it is clear that the Parthenon sculptures were legally and properly acquired. They have been kept in very good condition—very great care has been taken of them ever since—and they are

seen, for free, by 6 million people a year from all over the world. We believe that the British museum is the best place to keep them.

Mr. Eric Forth: Without pursuing the matter of Commissioner Kinnock's marbles, which might be indiscreet at this stage, may I welcome what the Secretary of State has said? The right hon. Gentleman will recognise that it would lead to absolute chaos if we started down the path of relocating works of art, wherever they are in the world. The best, safest and most proper position is the one that he is adopting.

Mr. Smith: It is rare for me to agree whole-heartedly with every word that the right hon. Gentleman says, but on this occasion I do, because he is right: if we were to open this question, a host of other questions about the location of works of art throughout the world would arise. I do not believe that anyone wants such questions to be reopened.

Mr. Robert Sheldon: Is my right hon. Friend aware that 13 years ago I took this matter up with Mr. Neil Kinnock and that, with me at any rate, he did not seek to defend the position? Is he further aware that it would be one thing if the marbles could be placed on the Acropolis itself, but that it would be nonsense to take them from one museum and put them in another museum that is not as well looked after as ours?

Mr. Smith: My right hon. Friend is right to point out that the proposal is not that the marbles should be replaced on the Acropolis but that they should be housed on the Acropolis hill in a museum specially built for the purpose whose architecture has been widely criticised. The marbles were legally acquired; they have been where they are for a long period; and they are seen by many millions of people, not just from Britain but from around the world. We do not believe that the case for their return is in any way compelling.

Media Ownership

Miss Julie Kirkbride: If he will make a statement on the regulations governing media ownership. [41989]

The Secretary of State for Culture, Media and Sport (Mr. Chris Smith): New rules on media ownership were established in the Broadcasting Act 1996. The Government have no plans to change them.

Miss Kirkbride: I thank the Minister for that response, but I should like to ask him about the proposals for the privatisation of Channel 4. We understand that the Chancellor of the Exchequer is trying to squeeze any amount of money out of any pocket that he can find, and I am sure that £1 billion-worth of proceeds from the privatisation of Channel 4 would make him very popular among his Treasury colleagues. What does the Secretary of State think of that proposed privatisation, especially


given that, when it was proposed by the Conservative Administration, it was widely scorned by Labour Members?

Mr. Smith: The hon. Lady will probably know that, during the election campaign, we made it clear that we had no plans to privatise Channel 4. That remains the case.

Mr. Derek Wyatt: What conversations on European media ownership has the Secretary of State had during our presidency of the European Union? Does he agree that the solution to the problem of United Kingdom media ownership is to be found in a broader European regulation?

Mr. Smith: Although we accept, and are seeking to implement, the television without frontiers directive, we do not believe that it is necessary to extend to Europe the purview of the entirety of media regulation. We believe that Europe has a role to play, and that is properly reflected in the television without frontiers directive, but we do not want to go further than that at this stage.

Mr. Damian Green: The Secretary of State should perhaps consider straight away a detailed piece of media regulation: the switch-off of analogue television services. Is he aware that his decision not to take a decision for two or three years will put in danger the development of digital television in this country, and will possibly damage the interests of an industry that is culturally and economically vital to our future?

Mr. Smith: The hon. Gentleman should have been present at the meeting of the digital television group to which I spoke last week. I said that we intended to make a decision on the switch-off of analogue as soon as possible. We are consulting on this matter: we issued a consultation paper a couple of months ago and the deadline for replies is within the next couple of months. We shall consider carefully the results of the consultation process, and shall then come to a view.

Performing Arts (Kettering)

Mr. Phil Sawford: What plans he has to support the performing arts in Kettering. [41990]

The Minister for Arts (Mr. Mark Fisher): Kettering has benefited from several national lottery awards totalling £1.7 million, including a £1.2 million award for a new performing arts centre at the Latimer school in Kettering.

Mr. Sawford: I thank my hon. Friend for that reply. We welcome the funding for the arts centre at Latimer school in my constituency, which will provide a much-needed facility for young people at the school and for the wider community. How will the latest lottery reforms help budding young artists and performers in my constituency and in the rest of the country?

Mr. Francis Maude: They will make things worse.

Mr. Fisher: They will not, as the right hon. Member for Horsham (Mr. Maude) suggests, make things worse:

on the contrary, the reforms will help by getting more money out to the regions so that decisions can be made more strategically and money can be spent more coherently, especially on projects, such as the one in my hon. Friend's constituency, which link community arts work to education. The strategy will develop a new generation of audiences in towns such as Kettering, and will bring out the creative talent of young people who may be the artists of the future.

Mr. Edward Garnier: The Minister will appreciate that probably the best and most well-known theatre in the Kettering area is that in Market Harborough.

Madam Speaker: The question is about the Kettering area. I know the hon. and learned Gentleman's constituency very well, and the distance between the two areas. We are talking about Kettering.

Mr. Garnier: You are quite right, Madam Speaker, although the distance between Market Harborough and Kettering is nought, because that is the boundary; besides, as you will know from your local knowledge, many people from the Kettering constituency come to the Market Harborough theatre.

Madam Speaker: But how many people from Market Harborough go to the theatre in Kettering? The hon. and learned Gentleman's question is not in order and we shall go no further with it.

Sport (Social Exclusion)

Mr. Harold Best: If he will make a statement on the role of sport in combating social exclusion. [41991]

The Minister for Sport (Mr. Tony Banks): We will never know the answer to your question now, will we, Madam Speaker?
I am convinced that sport can help to tackle the problems of social exclusion. I am encouraging the English Sports Council to direct more of its resources at that problem and to work closely with other agencies. My Department is working closely with the social exclusion unit in this area.

Mr. Best: Will the Minister confirm that the Government's national lottery policy will ensure that the Sports Council's money provides for disadvantaged areas such as the inner-city area of North-West Leeds? Will he also ensure that, when such funding goes to professional clubs—if it does—there is a guarantee that facilities will be made available to local schools and local community sport?

Mr. Banks: The priority areas initiative of the Sports Council for England allows up to 90 per cent. lottery funding—the usual being 65 per cent.—for sports projects designed to give special help to deprived areas. So far, it has supported more than 350 projects with awards totalling £186 million. The National Lottery Bill, once enacted, will enable the Sports Council to adopt a strategy that directs lottery funding to areas where there is an obvious lack of resources and where there is a great need for such projects.
Sport is one of the greatest ways of reaching young unemployed people who might otherwise be hanging around on street corners, expending their energy in non-constructive ways. Sport is a wonderful and imaginative way of organising young people and teaching them a great many things, including respect for themselves. I suspect that the new strategy of the English Sports Council will fully accord with the sort of views that my hon. Friend has just expressed.

Miss Anne McIntosh: Will the Minister for Sport comment on the impact on the English football team of excluding Gazza from the squad?

Mr. Banks: That is a very ingenious interpretation of social exclusion, and I congratulate the hon. Lady on being the first to raise the matter in the House this afternoon. It is a subject of great national concern. I think that the national coach, Glenn Hoddle, is to be congratulated on his brave decision. Sport is even crueller than politics: if someone gets it wrong, retribution follows quickly. We must all keep our fingers crossed in the hope that the decision was the right one—my own feeling is that it was. I expect the English team to do even better now, despite the personal tragedy surrounding the footballing exclusion of that great character Gazza.

Mr. Bruce Grocott: I know that my hon. Friend, like me, supports the widest possible dissemination of the benefits of sport, but does he agree that, when sport acquires large additional funds through sponsorship, television income or other commercial activity, it is desirable that the benefits of that additional income—I am thinking of football particularly—should be spread through the whole game? They should not result in an ever-widening divide between the haves and the have-nots.

Mr. Banks: My hon. Friend raises a point about which I know large numbers of ordinary football supporters feel strongly. I addressed a meeting of the Football Supporters Association in Wolverhampton on Saturday—the first sports Minister to do so, incidentally—where its members made the same point. Football must recognise that there may come an end to the enormous flow of money currently pouring into it. The game is fashionable at the moment; an awful lot of people who support football today may not do so in a few years' time. It is essential that resources are more evenly distributed throughout the game. Unless the grass roots are nourished there will ultimately be problems for the premier league. I hope that that message is taken seriously by the football authorities—I am always reminding them of it.

Museum Funding

Mr. John Bercow: If he will make a statement on funding for museums. [41993]

The Secretary of State for Culture, Media and Sport (Mr. Chris Smith): Funding for the national museums and galleries was protected for the current year. Additional funding has been made available to five museums and galleries to enable free admission to be maintained.
The Heritage Lottery Fund's £7 million access fund will support initiatives to widen access to museums and galleries throughout the UK. I will make a further announcement in the summer, when the departmental spending review is concluded.

Mr. Bercow: I thank the Secretary of State for that answer. The right hon. Gentleman pledged to provide free universal access to the national collections at an estimated cost of £40 million, yet he has succeeded in finding only £2 million, plus a further £7 million which he has raided from the lottery. Does not this latest betrayal prove that what needs to be preserved as a museum piece is Labour's list of broken promises?

Mr. Smith: The hon. Gentleman conveniently forgets that no such promise or pledge was ever given. Indeed, I am surprised that he is not more enthusiastic about the fact that we have managed to preserve the important principle of free admission to the national gallery, the Tate gallery, the national portrait gallery, the British museum and the Wallace collection.
That contrasts savagely with the actions of Buckinghamshire county council which, despite an increase in its standard spending assessment for education for the current year, is putting two museums under threat. As I recollect, Buckinghamshire has been under continuous Tory control since 1889.

Ms Beverley Hughes: I thank my right hon. Friend for the support that he has given so far to efforts to secure funding for the proposed imperial war museum of the north. However, is he aware that, although the project has already secured funding of £19 million from Europe and the private sector, the Heritage Lottery Fund is still refusing to consider the application? Is my right hon. Friend satisfied with the way in which the heritage lottery fund has responded to this application and, more generally, with the way in which it is allocating funds as between London and other parts of the country?

Mr. Smith: I know that this is a matter of great importance to my hon. Friend, who has discussed it in some detail with me. Both she and I have also discussed the matter with the Heritage Lottery Fund. I would urge her to continue such discussions in the hope of eventually obtaining a satisfactory outcome.

Mr. Peter Viggers: One way of assisting museums is to ensure that, when artefacts are made available by Government Departments such as the Ministry of Defence, appropriate museums are given advance notice and an opportunity to buy those artefacts at a reasonable price. Will the Secretary of State support a campaign to ensure that that is done?

Mr. Smith: I certainly view that as being entirely sensible. I think that it happens in the vast majority of cases anyway, but if the hon. Gentleman has a particular case in mind, I should be delighted to take it up personally.

Performing Arts (National Lottery Reforms)

Mr. Martin Linton: How the lottery reforms will benefit the performing arts. [41994].

The Minister for the Arts (Mr. Mark Fisher): The National Lottery Bill will radically reform the lottery, making the process easier for applicants, distributing grants faster and therefore more effectively, and ensuring that in future more is spent on supporting artists and activities, rather than just on bricks and mortar.

Mr. Linton: Is the Minister aware of pioneering schemes such as the ladder of development which has attracted a grant of £275,000 from the lottery's arts-for-everyone programme to the Battersea arts centre, an organisation which specialises in enabling young performing artists to get their feet on the first rung of the ladder? I should add that I am the chairman of that organisation. Has the Minister seen a letter from the director of Battersea arts centre to the Prime Minister congratulating him on the impact of the new deal on young performing artists, many of whom have in the past used the dole while getting on to that all important first rung of the ladder?

Mr. Fisher: My hon. Friend is quite right to state that Battersea arts centre is enormously resourceful in accessing lottery money. It has received £810 million for refurbishment and—

Mr. Linton: Thousand.

Mr. Fisher: Yes, £810,000—there is a slight difference. It has now also received a further grant for development. My hon. Friend is right to draw attention to the potential of the new deal for young artists at a crucial stage in their career. Young artists want a chance to work and to get their work in front of audiences. The Government are determined, through initiatives such as the new deal, to help them to do that.

Sir Sydney Chapman: As I am not persuaded by the argument that the introduction of a sixth good cause will not adversely affect the money going to the five existing good causes, including the performing arts, may I ask the Minister at least to monitor what happens? Does the hon. Gentleman accept that there is a need to help the performing arts institutions which, although not national institutions, are not regarded as regional institutions either—especially if they are in the outer London boroughs? The Old Bull arts centre in Barnet is a very good example of such an institution. It puts on some very good work, some of which, I understand, has recently fallen out of favour with new Labour.

Mr. Fisher: It is absolutely essential that the benefits of the lottery grants, and especially those for the arts, get to every part of the country, feed grass roots and community developments and bring on a new generation of artists and audiences. I entirely agree with the hon. Gentleman that that is a priority, and it is something which is very close to the Government's heart.

New Opportunities Fund

Mr. Ben Chapman: When the national lottery New Opportunities Fund will start to finance out-of-school-hours clubs. [41995]

The Minister for Film and Tourism (Mr. Tom Clarke): Subject to parliamentary approval of the National Lottery Bill, the New Opportunities Fund is likely to invite applications for the £400 million of funding for out-of-school-hours activities early in 1999.

Mr. Chapman: I am grateful to my hon. Friend for that response. I greatly welcome the National Lottery Bill and the New Opportunities Fund, which provide for a fairer geographical distribution of lottery moneys—Wirral, South has fared particularly badly in that respect—but this is an important programme, and early next year seems a long way off. Will my hon. Friend consider what steps he can take to bring forward the programme—pilot applications, for example?

Mr. Clarke: It is perfectly possible that pilot applications will be considered. I well understand my hon. Friend's arguments, which he put to the House very forcefully on 7 April and which we have taken into account. The policy directions that my right hon. Friend is issuing to all distributors will emphasise the importance of funding reaching all parts of the country. I hope that my hon. Friend will feel that he has made his point.

Mr. Geoffrey Clifton-Brown: Does the Minister not recognise that the £400 million of lottery money that will now be spent on out-of-school-hours clubs should come out of Government taxation and that, if the trend continues, the original five causes, which include charities and the arts, are bound to have their money reduced. How much further will the process go?

Mr. Clarke: The hon. Gentleman must know that those hoary old arguments were totally exposed on Second Reading and in Committee. The Prime Minister said before the election that we do not believe it would be right to use lottery money to pay for things which are the Government's responsibility. The policy that we are pursuing, with the overwhelming support of those who were consulted, is in addition and means that we can embrace social problems and social inclusion—issues which might be of interest to the hon. Gentleman.

Tourism

Mr. Peter L. Pike: What the Government are doing to support local authority initiatives in tourism. [41996]

The Minister for Film and Tourism (Mr. Tom Clarke): The Government fully recognise the major role that local authorities play in relation to tourism. Local authorities are closely involved in the Department's work on developing a comprehensive strategy for tourism which will identify how best to work together in future.
Councillor John Price is chairing the domestic tourism working group which is reporting to the main tourism forum.

Mr. Pike: My right hon. Friend will know that many local authorities, including Burnley, are becoming


increasingly involved in tourism. Regional development agencies will be key players in the development of tourism in the years ahead. Will local authorities be given a full role, working in co-operation with regional development agencies?

Mr. Clarke: Yes, unreservedly. My hon. Friend has raised an extremely important point. He will be pleased to know that almost all local authorities are members of their regional tourist boards, which, in turn, have taken the positive step of bidding to become partnership organisations of their regional development agencies, and we warmly welcome that.

Mr. Peter Brooke: Will the lottery be funding English tourism in future?

Mr. Clarke: The right hon. Gentleman, as a former Secretary of State, will know that—particularly because of the comprehensive spending round—all those matters are currently being discussed. I cannot respond to his specific point about the lottery, as the matter is still under discussion. He will understand that, because of the comprehensive spending round, he will have to wait just a little longer.

Mr. Gareth R. Thomas: Is my right hon. Friend aware that local authority initiatives to encourage tourism in my area may be undermined by the need to divert resources to fund trauma counselling for the younger members of the constituency after the departure of Geri Halliwell from the Spice Girls? Will he join me in encouraging Ginger Spice to think again?

Mr. Clarke: I am grateful to my hon. Friend for that question. I had the opportunity to meet the Spice Girls on location; I was also delighted to be at the premiere of their film. I am sure that what has taken place is simply a little local difficulty, which they are perfectly capable of sorting out. I wish them well.

Mr. Francis Maude: It is good to hear that the Minister has a policy on the Spice Girls, as well as on Gazza's exclusion from the England team. Does he accept that local authority initiatives on tourism depend heavily on the work of the English tourist board? Will he confirm the report in The Times on Saturday that his Department has agreed to the board's disbandment as part of the comprehensive spending review? Does he accept that his Department spends only a twentieth on English tourism of what is spent per capita in Scotland? Does he understand how angry the English tourism industry and English local authorities will be about this apparent concession by a Minister who sits for a Scottish constituency, made at the behest of a Chief Secretary and a Chancellor who also represent Scottish seats? Does that not confirm that the tourism industry is simply an optional extra for him and his team?

Mr. Clarke: That was a good try, but, as a former Treasury Minister, the right hon. Gentleman knows better. He should not indulge in what he clearly knows is speculation. He knows that the Government are committed to tourism, which is the fifth biggest industry in Britain and is worth £40 billion. He will recall that

comprehensive spending reviews have taken place under all Governments. Our commitment to the British Tourist Authority and the ETB is the same as the one we inherited from the Conservative Government. The right hon. Gentleman should pay less attention to newspaper speculation and a good deal more to the praise that the ETB, the BTA and the regional bodies have given to the Government, and particularly to their excellent contributions to my right hon. Friend's tourism forum.

Commercial Television

Mr. Chris Mullin: What recent discussions he has had with the ITC regarding the quality of commercial television; and if he will make a statement. [41997]

The Secretary of State for Culture, Media and Sport (Mr. Chris Smith): I meet the chairman of the Independent Television Commission periodically to discuss a range of broadcasting issues. Quality of content of commercial television services is an essential ingredient of the Government's broadcasting policy.

Mr. Mullin: Does my right hon. Friend share the widespread concern about the steady deterioration in the quality of commercial television since the Broadcasting Act 1990? Is he satisfied that the ITC has the powers and the will to reverse that trend? If not, what are his plans?

Mr. Smith: My hon. Friend will doubtless know that the report issued by the ITC on the 1997 performance review, which was presented to Parliament on 30 April, addressed some of those issues robustly. This is a matter for the ITC rather than the Government. The Government have a responsibility for the overall promotion of quality, but the assessment of individual programmes must remain a matter for the ITC.

Dr. Julian Lewis: The ITC is responsible for ensuring the application of the aspects of the Broadcasting Act 1990 that ensure that controversial subjects are dealt with with due impartiality. Will the Secretary of State raise with the ITC in his next meeting the discussion programme scheduled for ITV next Wednesday evening, which will feature a raft of conspiracy theorists, including one notorious fabricator and defamer, who intend to exploit the death of Princess Diana to put their crazy theories forward, to the distress of the families and without any balancing argument?

Mr. Smith: I am sure that the ITC and, indeed, the Broadcasting Standards Commission, will have heard very clearly what the hon. Gentleman has said.

Millennium Projects

Mr. Paddy Tipping: What proportion of millennium projects will be outside London. [41998]

The Secretary of State for Culture, Media and Sport (Mr. Chris Smith): The Millennium Commission has awarded just under £1.24 billion to 185 capital projects across the United Kingdom; 89.5 per cent. of the total has been awarded outside Greater London.

Mr. Tipping: Will the Secretary of State continue to consider the amount of funding going to the English


regions, particularly the east midlands? Will he turn his attention to the coalfield community landmark scheme, which I know he supports, and look at the apparent difficulties between the Millennium Commission and the partners?

Mr. Smith: First, my hon. Friend is right to identify the issue of relative underfunding of the east midlands region. The Millennium Commission is seeking particularly to address that through the awards scheme to individuals, which is up and running and proving to be remarkably successful. Secondly, I very strongly support the coalfield community project in principle. I know that there have been some difficulties with the details of the project, but I shall ensure that the Millennium Commission approaches them sympathetically.

Oral Answers to Questions — MINISTER WITHOUT PORTFOLIO (MILLENNIUM EXPERIENCE)

The Minister was asked—

Cost Overruns

Mr. Austin Mitchell: What allowance has been made for cost overruns in his estimates of expenditure on the millennium experience. [42014]

The Minister without Portfolio (Mr. Peter Mandelson): The project has a cash budget of £758 million. Within that, there is a prudent cost contingency provision of £88 million, which is subject to tight control and regular monitoring by the New Millennium Experience Company. The project, my hon. Friend will be pleased to hear, is on time and on budget.

Mr. Mitchell: I am delighted that my hon. Friend has time to be concerned at the looming problem. There is always a danger that, if there were no purpose, one could be bought for the project by throwing money at the problem. Is he as concerned as I am at the report by Rowan Moore in last week's Evening Standard of delays, major cost overruns, a lack of sponsorship and private contributions, and a failure to have a central purpose down at the folks' dome? All those looming problems will have to be compensated for by the lottery, draining even more money from the arts, education, health, sport and charities, unless they are tackled.

Mr. Mandelson: The article to which my hon. Friend refers—I gather—is almost entirely unsourced, unchecked and untrue. Money is not being thrown at a problem—far from it. I would have thought that he would be rather more optimistic considering today's news and would be congratulating the New Millennium Experience Company, which has announced with Marks and Spencer, yet another founding partner of the millennium experience, the launch of Children's Promise.
The Government have always believed that the millennium experience should be a truly national event and provide a lasting legacy. I cannot think of a better way in which to fulfil both those conditions than to

organise for everyone to give their last hour's salary in this millennium to help children in need in the next millennium. That is what is being launched today. It represents precisely the purpose and values that are embodied in the theme of the millennium experience and the dome—a time to make a difference, which it certainly will be.

Mr. Norman Baker: What will happen if there is a shortfall—I hope that there will not be—in funding from sponsors? Will the proposals for the dome be scaled down, will further money be taken from the lottery or will the taxpayer be further called on?

Mr. Mandelson: I have every confidence that the New Millennium Experience Company will raise the necessary funds. Nearly £100 million is already committed and confirmed in the form of private sector sponsorship. That is nearly £100 million of a target set for the end of this year of £150 million. That is what we have gathered since February. I have every confidence that 12 million or more people will want to visit the dome, and that the company's income target from visitors is equally realistic. I do not think that the problem to which the hon. Gentleman refers will arise.

Mr. Richard Spring: The hon. Gentleman hyped up surfball as the new 21st century sport for the dome. Did cost overruns cause its mysterious disappearance, or was there a fabrication about a non-existent game? Was not the hon. Gentleman guilty of talking complete and utter surfballs?

Mr. Mandelson: The reshuffle beckons, Madam Speaker. The serious play zone, to which the hon. Gentleman refers, will include explanations of the world of sport and games in the 21st century. It will cover the sort of 21st century game for which the term "surfball" was an illustrative title.

Mr. Barry Sheerman: Will my hon. Friend keep careful track of the point when the Jeremiahs and detractors of the millennium experience and the dome suddenly and quietly become enthusiasts? My hon. Friend will know that, increasingly, businesses throughout the country—not just Marks and Spencer, which has today announced the £12 million Children's Promise—see the project not only as a way in which to show the best of British work, skills and products, but as an opportunity to benefit from tourism and travel, as people from all over Europe and the world will come to make this a profitable exercise for UK plc.

Mr. Mandelson: My hon. Friend is absolutely right. It is because of the enormous progress that we have made during the last year that so many companies and organisations are flocking to the millennium dome to invest and to take part in the project.
We should recall what we have achieved during the past year. The dome is now firmly established on London's skyline and the roofing material is going on over the steel girders right on schedule. Young British-based designers are working hard to ensure that we have contents as inspiring as the building in which they are to be housed. We have five founding partners,


each contributing £12 million to the millennium experience. The fifth of these, Marks and Spencer, was announced this morning.
The New Millennium Experience Company has let 24 main trade contracts, 23 to companies based in the UK. My right hon. Friend the Deputy Prime Minister has launched plans for the millennium village at Greenwich and for new riverbus services to open up the Thames. My right hon. Friend the Secretary of State for Culture, Media and Sport has launched the nationwide millennium festival. We have ensured that the dome will have a long and productive life, and will not be torn down after one year, as was originally planned by the previous Government.
In short, we have turned the vision of the previous Government into firm foundations for a unique event which will bring the entire country together. It will inspire us and will make a real difference to our well-being, socially, spiritually and economically.

Ticketing

Sir Geoffrey Johnson Smith: If he will make a statement on the role of Camelot as the distributor of tickets for the millennium experience. [42015]

The Minister without Portfolio (Mr. Peter Mandelson): The New Millennium Experience Company announced on 24 February that it had reached agreement in principle with Camelot for it to be official distributor of tickets for the millennium experience at Greenwich. This will mean that there is a ticket outlet within three miles of 95 per cent. of the population of the United Kingdom.

Sir Geoffrey Johnson Smith: Is the hon. Gentleman aware that Camelot has already contributed to the dome? Can he confirm that no additional pressure was put on Camelot to spend more money on the distribution of tickets or to pay for the commissions of those people who retail at the point of sale?

Mr. Mandelson: Absolutely no pressure has been placed on Camelot or on any of the other private sector organisations that are increasingly keen to take part in this unique national event, no doubt partly for perfectly laudable commercial reasons, but, more importantly, because they want to contribute to the nation's millennium celebration. It is particularly welcome that Camelot should be playing the role that it is, as ticket purchases to allow people to come to the dome for the millennium experience should be as simple, straightforward and accessible as possible—it should be as easy to get tickets as it is to play the lottery. I believe that Camelot's involvement will greatly help us in achieving that.

Ms Diane Abbott: The House is aware that my hon. Friend does not believe that there will be a shortfall in sponsorship moneys. However, if there is a shortfall and the contingency money is swallowed up in cost overruns, for which such capital projects are notorious, where will the additional money come from—from the taxpayer or from lottery funds?

Mr. Mandelson: I do not envisage that the scenario that my hon. Friend describes will arise, as I do not

believe that there will be cost overruns. I assure her, however, that in no circumstances will any deficit be met from taxpayers' money.

Mr. Francis Maude: Leaving aside the extraordinary reversal in recent months in the Government's view of Camelot, does the hon. Gentleman agree that Camelot sponsorship of the dome is nowhere near sufficient to fill the huge gap that still exists? Will he confirm reports that the cost of the contents of the dome have been spiralling out of control and that, given the huge gap in sponsorship, his grandiose plans, which were revealed with such drama in February, are having to be radically scaled down as, in effect, the chief executive of the dome recently admitted? Has not the hon. Gentleman's stewardship of this important project been so catastrophic that a reshuffle is the only way in which he can hope to save face and to be taken out of a disaster area of his own making?

Mr. Mandelson: No. I shall be at the opening night on 31 December 1999 whatever my capacity. It is a great shame that, as the right hon. Gentleman bids farewell, he should be characteristically churlish in his contribution. I hope that he does not think that I am being equally churlish if I say that I hope that he makes as little impact in undermining the Government's economic policies as he has in his attempts to torpedo the dome in the past year.

Oral Answers to Questions — CHURCH COMMISSIONERS

The hon. Member for Middlesbrough, representing the Church Commissioners, was asked—

Bishops' Chauffeurs

Mr. Norman Baker: If he will make it his policy to reallocate money currently provided for bishops' chauffeurs. [42024]

Mr. Stuart Bell (Second Church Estates Commissioner, representing the Church Commissioners): No.

Mr. Baker: I am disappointed by that answer. Does the hon. Gentleman recognise that many people regard as an affront the fact that £317,000 is being spent on chauffeurs for bishops when poor people could benefit from that money? Would not it be better if the bishops dispensed with their chauffeurs and used the money to help the poor?

Mr. Bell: The two are not mutually exclusive. The money spent on full-time and part-time drivers enables the bishops who make use of those services to work while travelling to their many commitments, both in their dioceses and nationally. The service can also remove pressure, especially as travel, often late at night, is an unavoidable part of a bishop's job. The money spent represents about 0.05 per cent. of the Church's annual running costs.

Mr. Andrew Rowe: Does the hon. Gentleman agree that, if the hon. Member for Lewes (Mr. Baker) became a Minister in any conceivable


Government, he would expect to have a driver for exactly the same reasons? Does not his question represent a Liberal Democrat hypocrisy that we could do without?

Mr. Bell: I am grateful for the hon. Gentleman's assistance. In fact, seven bishops use their own cars and are paid a mileage allowance. In 1997, 31 bishops employed full-time or part-time drivers, which is hardly a heavy burden on the Church.

Assets

Mr. Ben Bradshaw: If he will make a statement on the returns made on the commissioners' assets for 1996–97. [42026]

Mr. Stuart Bell (Second Church Estates Commissioner, representing the Church Commissioners): The commissioners' financial year runs to the end of December. The total return on their assets was 17.1 per cent. in 1996 and 20.8 per cent. in 1997. In both years, their returns have been significantly higher than the performance of the United Kingdom pensions fund average.

Mr. Bradshaw: I thank my hon. Friend for his answer. Can he confirm that that means that the commissioners have now recovered the £800 million that they lost through their disastrous deals in the late 1980s and early 1990s?

Mr. Bell: I appreciate my hon. Friend's question, but the amount that he mentions relates to the fall in the valuation of the Church's assets between 1989, when the property market peaked, and 1992. Since then, the value of our assets has increased from £2.1 billion to £3.5 billion, and during my stewardship of one year, we have increased their value by £500 million. Success may have a thousand fathers, and I may be the 995th.

Sir Sydney Chapman: Will the hon. Gentleman confirm that a large proportion of the income of the Church Commissioners goes towards meeting the stipends and pensions of a considerable number of clergymen? Should not the House encourage the Church Commissioners to maximise their assets, albeit within ethical constraints?

Mr. Bell: We do pay the pensions of clergymen and their widows. Following the Pensions Measure passed last year, they will be paid by the dioceses in future, but the hon. Gentleman's point is important: the assets that we accumulate today mean better possibilities for the Church in years to come.

Ethical Investment

Ann Clwyd: What recent discussions he has had with the Church Commissioners on ethical investments. [42027]

Mr. Stuart Bell (Second Church Estates Commissioner, representing the Church Commissioners): Earlier this year, as a member of the commissioners' board of governors and of the assets committee, I was able to discuss and endorse the commissioners' revised

statement of ethical investment policy. The secretary to the ethical investment working group also keeps me regularly briefed on ethical issues.

Ann Clwyd: In view of GEC's long and continuing involvement in the arms trade with Indonesia, what exactly do the Church Commissioners think that they are achieving in their meetings with its board?

Mr. Bell: As always, I am grateful to my hon. Friend for her question.
Representatives of the ethical committee met senior management of GEC not long ago to discuss those very issues. We discuss them constantly with GEC, and we obviously have a strong ethical policy of not investing in companies whose main business is armaments. The current position in GEC does not constitute a breach of that policy, but we shall, of course, keep it continuously under review.

Mr. Simon Hughes: Following the question from the hon. Member for Cynon Valley (Ann Clwyd) and earlier questions on the same subject, can the hon. Gentleman tell us whether the forthcoming Lambeth conference will seek to agree a tougher regime on ethical investment—especially in relation to countries where democracy is at stake, such as Indonesia, or where nuclear weapons may be developed, such as India and Pakistan?

Mr. Bell: The hon. Gentleman may be interested to learn that the ecumenical Church investors group met today to celebrate 25 years of working together on matters of mutual concern in which the hon. Gentleman has an interest. I have already drawn the Archbishop of Canterbury's attention to the last question on this issue that the hon. Gentleman tabled for the Lambeth conference to consider, and I am sure that his voice will be heard.

Oral Answers to Questions — PUBLIC ACCOUNTS COMMISSION

The Chairman of the Public Accounts Commission was asked—

Non-departmental Public Bodies

Mr. David Heath: What recent discussions he has had with the Chancellor of the Exchequer on the financial implications of extending the scrutiny of the National Audit Office to non-departmental public bodies not presently covered. [42028]

Mr. Robert Sheldon (Chairman of the Public Accounts Commission): The Comptroller and Auditor General has inspection rights in regard to virtually all the 265 non-departmental bodies; however, he is not the auditor of nearly half those bodies, and, in the circumstances, accountability to Parliament is exercised only by his inspection rights. If the Comptroller and Auditor General were to be auditor of those bodies, he would be able to provide a more efficient and effective service to Parliament. The Chairman of the Public Accounts Committee and I met the Chancellor of the


Exchequer on 26 March this year, and we raised the possibility of the Comptroller and Auditor General's becoming the auditor of all non-departmental public bodies.

Mr. Heath: I thank the right hon. Gentleman for his reply. He is clearly dealing with the matter, and he clearly agrees with me that there are now gaps between the Audit Commission and the Comptroller and Auditor General in terms of audit. Does he not also agree that, if Ministers cannot abolish quangos, they can at least regulate them properly?

Mr. Sheldon: Of course I agree with the hon. Gentleman. It is a great pity that the European Court of Auditors has access that the Comptroller and Auditor General has not, as that means that the Comptroller and Auditor General cannot undertake the scrutiny that the House has a right to expect.

Mr. Geoffrey Clifton-Brown: The Chairman of the Public Accounts Commission will recall that I have raised this matter with him before in oral questions, particularly in relation to housing associations. Does he agree that a huge number of non-departmental public bodies are not properly scrutinised and that, therefore, there must be a risk that public money is being ill spent, possibly even fraudulently so? Will he renew his representations to the Chancellor that the Comptroller and Auditor General should have an auditing role over such bodies?

Mr. Sheldon: I fully agree, as £1.2 billion of public money is being spent in that area, and the Comptroller and Auditor General should be able to undertake the sort of examination that the House determines in so many other cases of that sort.

Oral Answers to Questions — CHURCH COMMISSIONERS

The hon. Member for Middlesbrough, representing the Church Commissioners, was asked—

Assets

Mr. Brian Jenkins: What the ratio of assets will be in (a) property and (b) shares for the financial year 1997–98. [42029]

Mr. Stuart Bell (Second Church Estates Commissioner, representing the Church Commissioners): At the end of the commissioners' financial year in December 1997, the proportion of their investment assets in commercial property was 14 per cent. Their agricultural and residential estates amounted to a further 8 and 6 per cent. respectively. The proportion of their assets in UK equities was 52 per cent. and in overseas equities, 9 per cent.

Mr. Jenkins: I thank my hon. Friend for that answer. Is he as concerned as I am about the move that the Church Commissioners have been making into equities? Bearing in mind the turbulent nature of some of those markets, does he feel that that is an investment that gives the security that the electorate deserve?

Mr. Bell: My hon. Friend is right to draw attention to the volatility of the equity markets, certainly those in the far east. Having studied independent research, the commissioners believe, however, that UK equities provide the best long-term match with their expenditure commitments and intend to retain them as the cornerstone of their fund, whatever the short-term fluctuations in the market.

Nuclear Tests (South Asia)

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Robin Cook): With permission, Madam Speaker, I should like to make a statement about the recent nuclear tests in south Asia.
The Government of Pakistan have declared that they carried out six nuclear tests—five on Thursday and a further one on Saturday. We recognise that the Government of Pakistan were under immense pressure to conduct those tests to match those initiated by India, but we are dismayed by the decision to respond in kind, and believe that the interests of Pakistan have been badly served by their decision to do so.
Pakistan's foremost concern is its national security. That security has not been strengthened by the tests. Long-term security for Pakistan can come only from lowering tension with India. It cannot be built on the unstable foundation of an arms race, which will only raise those tensions. Already, it can be seen from news reports from the region that the voices that have been encouraged by the recent confrontation are the voices of extremism.
However, Pakistan's loss is wider than its own reduced security. Pakistan had the chance to win international support and respect for its restraint. That opportunity has now been lost. As with India, the effect of the nuclear tests by Pakistan has been to diminish, not to enhance, the status of that country within the international community.
We have made clear to the Government of Pakistan our dismay at their decision. The Pakistani high commissioner was summoned to the Foreign Office the day after the first tests to receive a message for his Government of our concern. I have recalled the British high commissioner from Islamabad for consultation in London.
We have already taken a number of measures to bring home to the Government of India the strength of our concern at their nuclear test programme. Last week, we cancelled the visit by the Indian Chief of Naval Staff and we have also cancelled a forthcoming visit by its Chief of Army Staff. At the meeting last week of the General Affairs Council of the European Union, we obtained agreement to a presidency text that invited the Commission to review India's preferential trade treatment. Having taken such steps against India, I would expect comparable measures to be agreed by European partners against Pakistan for similar action by it.
Britain's aid programme, unlike that of some other countries, is directly targeted on providing help to the poorest people in the poorest regions. We remain convinced that it would be wrong to penalise the most vulnerable citizens in either country by suspending that aid programme. However, no one, least of all the Governments of both countries, should understate the economic price that they will pay for isolation within the international community. Already, the value of the Indian rupee has fallen. Last week, the Indian Government offered $1 billion of Government bonds and got no takers. In May, there was a net outflow of foreign institutional investment and, last week, the World bank deferred three loans to India for energy and highways projects of almost a billion dollars as a result of member states' objections, including Britain's.
The adverse impact of those economic developments will make it more difficult for India or Pakistan to reduce poverty. That is why it would be a tragedy if both their

Governments were to persist in an arms race to acquire the most expensive weapons, which would do nothing to help the millions of their citizens who live in poverty.
A regional arms race would have an impact that would stretch far beyond the region. Other states that have already demonstrated their interest in acquiring nuclear weapons technology will watch closely to see how the international community responds to the precedent set by India and Pakistan. Their nuclear programmes are not, therefore, merely an internal matter for India and Pakistan, but a legitimate matter of concern for the world.
At the suggestion of the United States, the permanent five members of the Security Council of the United Nations will meet in Geneva on Thursday to discuss the security implications of the nuclear test programmes and the heightened tension in the region. As President of the G8, Britain has called a meeting of the group's Foreign Ministers in London next week to co-ordinate the response of the leading economies to the nuclear test programmes, and to consider how best to promote dialogue with India and Pakistan, and between India and Pakistan.
There must be two strategic objectives in our dialogue with the two countries. First, we must press India and Pakistan to sign up to the global regime against nuclear proliferation. The best ways to reduce tension in the region would be for both India and Pakistan to sign up to the comprehensive test ban treaty, to join negotiations at Geneva, without conditions, and to halt production of fissile material for nuclear weapons. Neither the interests of Pakistan and India nor those of any other country in the world are served by encouraging the spread of nuclear weapons.
The second objective must be to tackle the roots of tension between the two countries. There must be a meaningful dialogue between India and Pakistan on the issues that threaten stability in the region. Their security would be much better promoted by confidence-building measures than by nuclear testing programmes.
We must seek a balance in our approach to the issue. We must confront firmly the dangers of nuclear proliferation, but without seeking confrontation with the peoples of India or Pakistan. Britain has a long history of close ties with both countries, and millions of people in Britain have community links with relatives throughout the sub-continent. Britain does not voice its dismay at the recent nuclear tests out of hostility, therefore. On the contrary, it is as a friend of both countries that Britain is appalled at the risks and costs to the peoples of the sub-continent of a nuclear arms race. I ask the whole House to show our united resolve in condemning the nuclear tests and in calling on the Governments of India and Pakistan to stop testing and start talking.

Mr. Michael Howard: The Foreign Secretary is, of course, right to emphasise the extreme seriousness of the situation in which we find ourselves. Nuclear proliferation is one of the greatest dangers to face humanity as we move towards the millennium. When the Foreign Secretary last made a statement on the matter on 14 May, he urged the leaders of Pakistan to show restraint. I share his dismay at their actions since then, and at their failure to respond to his call.
Does the Foreign Secretary accept that these events represent a definitive crisis for the international community and its policy towards non-proliferation?


If the actions that he has identified do not have the consequences that he seeks, will not the approach thus far taken by the international community to the range of problems posed by non-proliferation have failed? Does not the failure of the consequences for India to which he referred to deter Pakistan suggest that the omens for the continuation of this policy are not good?
We wish the right hon. Gentleman well in his efforts to participate in a resolute response by the international community to this grave state of affairs, but I hope that he accepts that what has happened thus far in the sub-continent, to the dismay of those who are friends of both India and Pakistan, means that the task that he and his colleagues face is immensely serious.

Mr. Cook: I am grateful to the right hon. and learned Gentleman for what I take as support for my statement. If we look back over the past decade, the history of nuclear non-proliferation is not one of failure. What is so depressing about the decision by India and Pakistan to proceed to nuclear tests is that, over recent years, a large number of countries have renounced the nuclear weapons path. The Ukraine, Kazakhstan and Belarus, emerging from under the Soviet Union, explicitly rejected the nuclear option and asked for removal of nuclear weapons. Brazil and Argentina have signed treaties that gave each other the confidence not to proceed to nuclear weapons. Throughout Latin America, countries that could have gone down that path have chosen not to do so. Perhaps most encouragingly of all, South Africa, with the change of Government and constitution, has dismantled its nuclear weapons programme.
The tragedy of India and Pakistan is that they are not going with the trend of the rest of the world but against it. For that reason, I would not at all dissent from the right hon. and learned Gentleman's description that this poses us with a critical challenge to the international response. It is up to us all to make sure that the international community rises to that challenge.

Mr. Gerald Kaufman: Is my right hon. Friend aware that to condemn the tests carried out by Pakistan is an especial duty for those of us who for many years have regarded ourselves as friends of Pakistan, and continue to do so? Is he further aware that the world now faces the greatest danger of nuclear war since the Cuban missile crisis, that such a war between India and Pakistan almost took place in 1994, and that there was a danger of a war only last week? Is he aware that the danger of nuclear war between India and Pakistan, which would not be a regional war, will continue until Kashmir is solved between India and Pakistan? Will he therefore consult the United States Secretary of State, the Secretary-General of the Commonwealth and other people of good will actively to bring the parties together to prevent what otherwise will be a global catastrophe?

Mr. Cook: There has been no stouter friend of the people of Pakistan in the House than my right hon. Friend. His words therefore carry particular weight when he criticises this decision by the Government of Pakistan. I agree entirely with him and I said in my statement that the best way to build security for both countries is to tackle the source of tension between them. Any such

meaningful dialogue, to be comprehensive, must include their disagreement over Kashmir. I agree that that must be part of the overall solution to the crisis. It is, of course, primarily for the parties concerned themselves to find the solution, but the search for it must now be all the more urgent, and a solution to the tensions over Kashmir would do far more for the security of both countries than 100 nuclear test programmes.

Mr. Menzies Campbell: There is nothing in the Foreign Secretary's statement with which I would disagree. I suspect that many hon. Members are in that position. Notwithstanding what he said in response to the shadow Opposition spokesman, the right hon. and learned Member for Folkestone and Hythe (Mr. Howard), is it not the sad, harsh and incontrovertible fact that the efforts of the declared nuclear powers under the non-proliferation treaty to discourage nuclear proliferation have failed? The five declared nuclear members—who are, of course, the permanent members of the Security Council of the United Nations—have to take some responsibility for that failure, because they did not implement vigorously their responsibilities under article 6 of the non-proliferation treaty.
Ten days ago, when I raised the question of the level of the United Kingdom's nuclear deterrent, the Foreign Secretary said that that was a matter for the Secretary of State for Defence. Has he had time to reconsider that position? If we are to persuade India and Pakistan to exercise restraint and to become signatories to the comprehensive test ban treaty, should we not demonstrate some restraint ourselves? In that respect, will the right hon. Gentleman now confirm his Government's manifesto commitment to deploy no more warheads on the Trident nuclear missile system than there are on the Polaris system it replaces?

Mr. Cook: To repeat a point I made to the right hon. and learned Member for Folkestone and Hythe (Mr. Howard), we have to keep in perspective any failure of the non-proliferation regime. After all, 150 countries have now signed the comprehensive test ban treaty and 180 countries have signed the non-proliferation treaty. It is India and Pakistan which are very much in the minority and on the margin of the international community, not the five permanent members of the Security Council, which have all played a leading part in negotiating those treaties.
As for the record of this Government, since coming to power we have withdrawn the free-fall bomb, the WE177, so there is now only one nuclear weapon system currently in deployment. In April, we, along with France, were the first countries among the nuclear weapon powers to sign the comprehensive test ban treaty. We are playing a leading part in Geneva in negotiating the fissile material cut-off treaty and we very energetically observe the moratorium on nuclear tests.
I said to the hon. and learned Member for North-East Fife (Mr. Campbell) last week, not that what became of the British nuclear deterrent was nothing to do with me, but that he had invited me to make a statement that would come best from my right hon. Friend the Secretary of State for Defence. My right hon. Friend will be making his own statement about the disposition of our nuclear forces come the response to the strategic defence review.


When the hon. and learned Gentleman hears that, I think that he will find confirmation that our plans for nuclear arms control are both ambitious and practical.

Mr. Donald Anderson: How seriously does my right hon. Friend take the danger that Pakistan might be tempted to use battlefield nuclear weapons first, using weapons technology given them by the Chinese and North Koreans, with the escalation that might follow from that, if, in any future armed conflict—he will know of the three armed conflicts since independence—the Pakistani armed forces were to be worsted because of the disparity in the armed forces of the two countries? What confidence-building measures does he envisage in the short term, especially in trying to get some form of hotline communication between the two countries?

Mr. Cook: Our objectives must be more ambitious than a hotline; in particular, we must put every possible pressure on both India and Pakistan to make sure that they do not proceed from tests of nuclear devices to deploying those devices as weapons in deliverable systems. My hon. Friend is right to say that there will be particular interest in those countries in battlefield nuclear weapons systems. Over the past few days, I have been dismayed to read what I think are dangerous analyses suggesting that the European experience can necessarily be replicated in south Asia, but if people want to learn from our experience, we in Europe took the deliberate decision to dismantle the theatre and battlefield systems first, precisely because they were the most dangerous systems and might have been used first. I therefore very much hope that that is not a line down which south Asia will now go.

Mr. Tom King: Does the right hon. Gentleman accept the analysis of the right hon. Member for Manchester, Gorton (Mr. Kaufman) that not only is this a most critical situation and the worst since the Cuban missile crisis, but there is a real risk that the events of the past week have given the impression that we might have been extremely close to nuclear conflict of some sort? At such a time, of such urgency and with such a need for leadership, is it not clear that there is not much question of where that leadership lies? This country has the presidency of the G8 and of the European Union, and a role in the Commonwealth. Should I read into what the right hon. Gentleman said about the meeting of the G8 and about opening a dialogue that an effort will be made to send, under this country's leadership, emissaries to both countries immediately to start negotiations and discussions? That could be done as well as withdrawing ambassadors and using conventional means, which, I understand, may be necessary in the protocol of such matters. Is it not now necessary to make a much greater impact in a very grave situation?

Mr. Cook: I take it from what the right hon. Gentleman said that he does not disagree with our decision to recall our high commissioner for consultation. Not only is that a way of bringing home our concern, in Islamabad as in Delhi, but it is of practical benefit, in that it enables us to have the advantage of the experience and direct knowledge of those high commissioners.
On leadership, I assure the right hon. Gentleman that the point of summoning the special meeting of the G8 Foreign Ministers, as with that of the Foreign Ministers of

the permanent five, is to consider how, together, we can re-strengthen dialogue with India and Pakistan and encourage dialogue between them. That will be at the centre of our discussions. As to the precise method by which we shall choose to pursue that—whether it is by special envoy, by inviting their representatives to meet us or by another method—we shall be considering that until those meetings take place. We are all seized of the critical importance of this matter, and the world must act together to respond to it.

Mr. Roger Godsiff: I concur with what my right hon. Friend has said and I, too, condemn the Pakistani Government's decision to conduct nuclear tests. I welcome his statement that until the main issues that separate India and Pakistan are resolved, there will never be peace in that region.
On Kashmir, does my right hon. Friend acknowledge that, in the past, bilateral discussions between Pakistan and India have not, sadly, achieved a resolution of the dispute? Does he agree that it is incumbent on him, at meetings of European Foreign Ministers and of the G8, and on Britain, as a member of the Security Council, to bring Kashmir to the top of the international agenda, because without a resolution there will, regrettably, never be peace between India and Pakistan?

Mr. Cook: The House will be aware that, conventionally, I am criticised for paying too much attention to Kashmir rather than for paying insufficient attention. I agree with my hon. Friend's analysis, but, ultimately, the solution to the problem of Kashmir can be found only with the concurrence of India and Pakistan. The countries that wish them well and organisations such as the G8 and the permanent five members of the Security Council, which are now exercised about the tension between India and Pakistan, might have a role to play, but that role is to encourage the two main parties to find the solution with which they can both live.

Mr. Nicholas Soames: Will the Foreign Secretary consider examining the number of military students in Britain who are from Pakistan and India—he will find that there are quite a number of them—and whether it continues to be appropriate for them to undergo military training in this country? Secondly, will he consider following the model used in the discussions between the Palestinians and the Israelis, whereby a country that is quite dissociated from the area, such as Norway or Sweden, could take on a role that may be appropriated by the G8 to oversee a series of talks that would go on until they came to a conclusion?

Mr. Cook: The hon. Gentleman's latter point will certainly be under examination when we meet. The role of mediator may not be appropriate, but perhaps there will be a role for a facilitator.
On the hon. Gentleman's other point, I shall consider what he said and inquire about the numbers of such students. As I have said, we have already acted to stop high-level military contacts and we are being particularly vigilant about any contact with nuclear scientists from either country. I would not necessarily wish to rupture the ties to which the hon. Gentleman referred. We can resolve the situation only by reducing the tension through dialogue between those countries. We need to achieve the


right balance between conveying our dismay at the decisions and promoting our contact with the countries, to avoid creating a sense of isolation and to encourage them to be drawn into, not to shy away from, the obligations of the international community.

Mr. Piara S. Khabra: Does the Foreign Secretary agree that, following the nuclear tests by India and Pakistan, it is the moral duty of the five big powers to reduce their stockpiles of dangerous weapons to a level that encourages India and Pakistan to sign the comprehensive test ban treaty and the non-proliferation treaty? Does he further agree that countries such as China and America have in different ways helped Pakistan to develop its nuclear technology and that that has been a folly in American foreign policy?

Mr. Cook: Of course I would agree with my hon. Friend that the permanent powers, which happen also to be the nuclear weapon powers, have a special obligation under article 6 of the non-proliferation treaty. As it happens, Britain has reduced its nuclear stockpile within the past 12 months. Much more progress would have been made if the START 2 treaty had not been blocked in the Duma. I hope that a healthy consequence of the current international anxiety over south Asia will be to prompt some rethinking in the Duma as to whether it is doing its best for Russia's interests by blocking the progress of that treaty.
On the question of collaboration with Pakistan, America has been vigilant over recent years in its relations with Pakistan. There are obvious links between Pakistan and China, but if India reflects on the Chinese reaction to the nuclear test programme, it will realise that it is difficult for anybody in India to convince himself that he now has greater security in relation to China than he had before. Relations with China are now at a 20-year all-time low.

Dr. Jenny Tonge: I am sure that the Secretary of State realises that more than half of the world's poorest people live in India and Pakistan and that 5 million people suffer from AIDS in the Indian sub-continent, where the epidemic is totally out of control. Nearly 1,000 people died recently, simply from the effects of drought. Does the right hon. Gentleman agree that this is an obscene recent example of countries not getting their priorities right? How can he make his ethical foreign policy work without jeopardising the poor in those countries?

Mr. Cook: I have to say bluntly to the hon. Lady that there is no way in which we can impose any form of economic sanctions without having an impact on some of the poorest at the margins of those societies. Of course that is one of the guiding principles that we are trying to apply, to make sure that we soften the impact as much as we can. That is why we do not propose, unlike some other countries, to withdraw our aid programme and why we are trying to target measures, such as reviewing trade preferences, in ways that may make some senior business men recognise that perhaps they should speak to senior politicians about the effect of the nuclear test programme.

I cannot deny that if those measures were put into effect, they would worsen India's economic position and, therefore, that of its poorest people.
I entirely agree with the hon. Lady about mistaken priorities. One of the great ironies of the Indian nuclear test programme is that on the day that the tests were greeted with demonstrations of support in the streets, there were riots resulting in the smashing of electricity sub-stations because of dissatisfaction with the poor quality of India's electricity grid.

Mr. Dale Campbell-Savours: May I welcome my right hon. Friend's desire to promote discussions between India and Pakistan? I do not think that the process will be helped in any way if we introduce measures that will penalise either India or Pakistan. Such a process would be totally counter-productive. Given our special relationship with the peoples of those two countries, our function is to get in there, using friendships that have been built up over many generations, and ensure that they sign the necessary treaties as soon as possible.

Mr. Cook: I have great sympathy with the objective that my hon. Friend mentions, and I sought to make it clear in my statement that we are giving a balanced response that seeks to bring home our concern about the nuclear tests, but not to drive the peoples of those countries into a sense of isolation that might encourage them to support their Governments in the steps that they have taken rather than to be critical of them. Therefore, I am very conscious of the point that my hon. Friend makes, but if we do nothing, there is a real danger that the wrong lesson will be taken—that we do not really care about the fact that those countries have broken the world's non-proliferation regime. That is why it is important that we act in a way that cannot be portrayed as hostile to the peoples of those countries, but which brings it home to their Governments that we view this serious step with the greatest gravity.

Mr. Tony Baldry: I am sure that the Foreign Secretary will agree that no hon. Member could have any quarrel with anything in his statement—indeed, we support all of it—but I suspect that he will also understand that everyone here is concerned that there should be some movement towards resolution of the issues that divide India and Pakistan and that, of all the countries in the world, neither Pakistan nor India has a better friend than the United Kingdom.
What we should like to hear is this. Of course the work that is done in the G8, the Security Council of the United Nations and the European Union is invaluable, but the UK, as the best friend of India and Pakistan, has a particular role. It would be interesting to hear whether the Foreign Secretary is prepared to signal to both India and Pakistan that quietly we are always willing to help to act as a facilitator, if India and Pakistan ever felt that that would be helpful. As has been said, the experience has been that it is only when a facilitator has been prepared to help that India and Pakistan have made any great progress. Of course, these matters have to be resolved between the two of them bilaterally, but they need help, and the UK is in a unique position to offer such help.

Mr. Cook: I have said to both countries that Britain is willing to offer its good offices if both countries are


willing to accept them. Some of the recent statements of support for that view would have been welcome at the time that I expressed it, but the offer is on the table and I welcome the fact that there is now increasing recognition of the importance of the issue and of the need for action to tackle it, particularly by the two parties concerned.
Of course, Britain, with long historical and close community ties, is well placed as a friend of both countries, but with that friendship and understanding, perhaps the best role that we can play is to ensure that the international community also understands those countries and acts with us in a way that helps to produce a solution and to reduce tension between them.

Mr. Dennis Skinner: Is my right hon. Friend aware that it gives those of us who marched the streets from Aldermaston to Hyde park and elsewhere, to call for unilateral nuclear disarmament, no comfort to know that the nightmare scenario that we talked about at that time has come about? Does he appreciate that the sad thing is that Britain does not have the same moral authority as many other countries that do not have nuclear weapons? Will he take a suggestion from me not to call on people in America, Russia and other countries that possess the bomb to intercede? Perhaps the best person to do the job would be Nelson Mandela, the President of South Africa, which has renounced nuclear weapons. He could take charge of some kind of mission to intercede on behalf of the big powers, because he commands more moral authority in this affair than we do.

Mr. Cook: My hon. Friend speaks with great consistency. However, I do not think that Britain can be accused of speaking falsely on this issue. We do, after all, have the capacity to carry out nuclear tests. We have chosen not to do so. It would have been better for south Asia if both India and Pakistan had shown the same restraint.
My hon. Friend is right that South Africa's international stature and respect have grown immensely because it renounced its nuclear weapons and wound down its nuclear weapons programme. That may make it an acceptable interlocutor with India and Pakistan, but I hope that the Governments of both those countries will reflect on the fact that they, too, could have gained the same respect that South Africa now commands if they had shown the same restraint and the same responsible approach to nuclear weapons programmes.

Dr. Julian Lewis: May I inject less of a doomsday scenario into the discussion? I remind the Foreign Secretary that he, like me, is old enough to remember the Cuban missile crisis of October 1962. I respectfully suggest to him that comparisons between that incredibly tense situation and what is happening now are overblown hoo-hah. May I also remind him that two years later, in 1964, the Chinese acquired the bomb and first exploded it? At that time, there was an hysterical reaction and people said that it would lead to an uncontrollable arms race and to disaster, but it did not. May I finally suggest that it was inevitable that, once India had exploded its bomb, Pakistan would do likewise? Their actions will not be affected by empty moral gestures by Labour Back Benchers or by a Liberal Democrat

Front-Bench spokesman suggesting that the explosion of such weapons has something to do with the number of Trident warheads held by the British.

Mr. Cook: The hon. Gentleman obviously believes in the theory that nuclear weapons at all times and in all places are a good thing. It is not clear to me from what he said where exactly he would draw the line or who he would suggest should not have nuclear weapons. The responsible attitude—which was also taken by the Conservative Front-Bench spokesman—is to seek to prevent the proliferation and escalation of nuclear weapons.
I am not sure that I take it kindly to be reminded that I am old enough to remember the Cuban missile crisis, but I remember it very well and how glad we were when it was all over. I would not wish to visit such a hair-trigger situation on the peoples of south Asia, and I hope that we can avert such a crisis.

Mrs. Alice Mahon: When my right hon. Friend visited India and offered to mediate, he was absolutely right about the issue of Kashmir, despite what some of his critics have said. He is right now to say that that is the root of the problem between India and Pakistan. A strong body of opinion believes that a free and independent Kashmir would perhaps be the answer. Would he consider raising the issue of a plebiscite, so that the people of Kashmir can say what they want?

Mr. Cook: I am grateful to my hon. Friend for her kind words. The matter that she raises is the one issue which could unite Delhi and Islamabad, because neither is enthusiastic about an independent Kashmir. We have consistently taken the view that, to be just, the solution must be acceptable to all the peoples of Kashmir—Muslim, Hindu and Buddhist. Finding a solution that would be acceptable to all is a difficult task. Many of them will have a different view of where their future lies. They must be involved in finding a solution, and it must be acceptable to them.

Mr. Geoffrey Clifton-Brown: Does the Foreign Secretary agree that Britain's primary role as a good friend of both India and Pakistan is to urge restraint? Such restraint would be much more likely if a potential solution to the Kashmir problem could be found. This problem has existed since 1947: three wars have been fought and more than 1 million people have been killed. Is it not high time that Britain and America exercised some real leadership and sought a Security Council initiative to determine whether a solution to the problem of Kashmir is forthcoming? Does the Foreign Secretary agree that merely adopting the position of meaningful dialogue between the two countries is no longer acceptable?

Mr. Cook: The hon. Gentleman highlights one of the ironies of India's actions. For 30 years, India has sought to prevent Kashmir from being an issue provoking international attention, but its nuclear test programme has achieved what has been the objective of its policy to prevent for all that time. As to the hon. Gentleman urging us to be more proactive on Kashmir, I repeat to the House that our offer of good offices and to work with other countries and multilateral organisations to find those good


offices is on the table if both parties are willing to participate. However, when I last made that offer, I do not recall his congratulating me on it. Those who now recognise the gravity of the situation in Kashmir should perhaps reflect on how much humbug they spoke last autumn when I raised the matter.

Mr. Peter L. Pike: As secretary of the all-party parliamentary Pakistan group and as a friend of India, although I understand the pressure on Pakistan to carry out nuclear tests following the tests by India, I believe that Pakistan's decision is regrettable and should be condemned. I strongly support my right hon. Friend in that respect. Unless we solve the tensions that simmer between those two countries, I fear that there will be a fourth war between them. Whether it is nuclear or non-nuclear, it will solve nothing.
I respect my right hon. Friend's views, and I completely understand that India and Pakistan must take the lead on the Kashmir issue, but we still need to spell out to them, time and again, that the only way to unblock the logjam is to get those two countries to sit down at a table and sort out the problem.

Mr. Cook: I agree absolutely: a solution can be found only with the co-operation of the two parties. That is why any willingness to help from outside must proceed with their agreement. But we would urge India and Pakistan to find a solution consistent with their own agreement at Simla and with the UN resolutions.

Mr. Mike Gapes: While I agree with the condemnation of India and Pakistan, does the Foreign Secretary agree, after many years of the covert development of nuclear weapons by both countries, that there are now overtly seven nuclear weapons states? Is it not time that the five members of the Security Council called an urgent meeting with those two overt nuclear weapons states to discuss what they and some other countries have hitherto regarded as unfair and discriminatory treaties? I do not accept that argument, but

it is used by India in particular. In that way, we can ensure that the process is not extended to the middle east and elsewhere.

Mr. Cook: I, too, reject the argument that my hon. Friend has outlined. The non-proliferation treaty has been signed by 180 countries, and it is difficult credibly to argue that it is an unequal treaty, when nearly every country in the world, with the exception of a few such as India and Pakistan, has signed up to it.
As for inviting the two countries to sit down with the five nuclear weapons powers as new nuclear weapons powers, I would urge extreme caution. In the wake of the tests, we must be careful not to appear to reward those countries for carrying them out. If we did so, I fear that that would encourage other countries to follow suit, secure in the knowledge that there was a precedent for them, too, to be treated as de facto nuclear powers.

Mr. Gordon Prentice: I speak as a friend of Pakistan with thousands of Kashmiris in my constituency. Is it not sick madness when a country such as Pakistan, 70 per cent. of whose population is illiterate, spends 25 per cent. of its national budget on defence? Should not that be unreservedly condemned?
When the button was pressed last Thursday evening, I was speaking in my constituency to a reception held by the Kashmir Welfare Association, where my message was the same. Many of my Kashmiri constituents, moreover, were very exercised by the line put out by the Pakistan authorities on Thursday as a pretext for the explosion—that the Indian Government were at that moment preparing to launch an attack on Pakistan's nuclear installations. Does the Foreign Secretary have any intelligence to confirm or reject that?

Mr. Cook: If I had, it would be most unwise of me to share it with the House. I notice that the Indian Government have denied any such intentions, and I have no reason to doubt their word on that.
I strongly agree with my hon. Friend's opening remarks; I know his constituency and his constituents, and I know that he speaks with genuine affection and concern for the peoples of Pakistan. It is deeply tragic that a country where combating illiteracy should be a real national priority carries a defence budget that so greatly outstrips its education budget.

Northern Ireland Referendum

The Secretary of State for Northern Ireland (Marjorie Mowlam): With permission, Madam Speaker, I shall make a statement about the outcome of the referendum held in Northern Ireland on 22 May.
There was a very positive result: 81 per cent. of the people in Northern Ireland voted, and 71 per cent. of them supported the agreement reached on Good Friday. There is no doubt that it was an emphatic endorsement of the agreement from all sections of the community—republicans, loyalists, Unionists and nationalists. Now they want to see the agreement as a whole—every part of it—work.
In their own referendum, the people of the Irish Republic voted by 94 per cent. to endorse the changes to the Irish constitution required to implement the agreement.
By these referendums, the people of Ireland, north and south, have voted overwhelmingly to say yes to the principle of consent; yes to using only peaceful means to resolve political disputes; yes to fairness and equality; and yes to building new relationships based on agreement, not coercion.
The people have spoken. Those who seek to frustrate that—whether by violence or by other means—fly in the face of democracy. Our job now—both as the Government and in this Parliament—is to act as the people wish.
Let me briefly set out for the House the steps that are now being taken. Last Wednesday, I signed an order bringing into force all the remaining provisions of the Northern Ireland (Elections) Act 1998. The elections to the New Northern Ireland Assembly will take place on 25 June, with the nominations closing at 4 pm on 3 June, this Wednesday. It would not be right for the Government during the election campaign to seek to influence the people's choice, directly or indirectly, but I hope that, on 25 June, those who voted in the referendum will finish the job by voting in the assembly elections as well.
In the meantime, we will work to implement the agreement. Both the British and the Irish Governments will very soon bring into force schemes under the Northern Ireland Arms Decommissioning Act 1997; I am grateful for the efforts of my predecessor, the noble Lord Mayhew, in establishing that legislation and its amnesty provisions. When that happens, there will then be no practical barrier to a start to decommissioning. We look to all parties to honour the commitment that they made to use any influence that they may have to achieve the decommissioning of all paramilitary weapons within two years.
I shall also present to the House shortly a Bill to implement the provisions of the agreement relating to prisoners. The Government are committed to seeking to enact the appropriate legislation to give effect to new arrangements by the end of June. The Bill, which I know the House will wish to examine carefully, will include the safeguards that are in the agreement and to which my right hon. Friend the Prime Minister drew attention in his speech in Belfast on 14 May. The agreement is to be implemented in all its parts, not cherry-picked.
As the Prime Minister said, we need to be sure that both the terms and the spirit of the agreement are met. The Prime Minister set out a range of factors on which it

would be possible to make an overall judgment so that we can be sure that all parties are committed exclusively to peace and democracy and that violence is genuinely given up for good.
There are a range of factors to take into account, as the Prime Minister said:
first and foremost, a clear and unequivocal commitment that there is an end to violence for good, on the part of republicans and loyalists alike, and that the so-called war is finished, done with, gone; that, as the Agreement says, non-violence and exclusively peaceful and democratic means are the only means to be used;
that, again as the Agreement expressly states, the ceasefires are indeed complete and unequivocal; an end to bombings, killings and beatings, claimed or unclaimed; an end to targeting and procurement of weapons; progressive abandonment and dismantling of paramilitary structures actively directing and promoting violence;
full co-operation with the Independent Commission on decommissioning, to implement the provisions of the Agreement;
and no other organisations being deliberately used as proxies for violence.
As my right hon. Friend the Prime Minister again made clear:
we are not setting new preconditions or barriers".
However, we will be giving legislative expression to those factors in the Bill relating to prisoners and the Bill to implement the remainder of the agreement which we shall introduce later this Session.
Our aim is to transfer powers to the assembly and to establish the north-south ministerial council, agreed implementation bodies, the British-Irish council and the British-Irish intergovernmental conference at the same time. We are aiming for early 1999.
In the meantime, following the elections, the assembly will meet first in shadow form in July. In the shadow period of the assembly, Members will elect a Presiding Officer, consider Standing Orders, elect a First Minister and Deputy First Minister, examine Northern Ireland departmental structures and arrangements and allocate other ministerial posts.
In the period after the assembly elections, there will also be meetings of the British-Irish council and the north-south ministerial council in shadow form. In the shadow north-south ministerial council, representatives from Northern Ireland and the Irish Government will undertake a work programme in consultation with the Government with a view to identifying and agreeing by 31 October this year areas for north-south co-operation and implementation.
The agreement also provides for a range of measures to promote rights and equality of opportunity in Northern Ireland which the Government will continue to implement.
I hope very shortly to announce the other members of the independent commission to review policing in Northern Ireland who will serve alongside the chairman, Chris Patten. I also hope to announce soon the arrangements for the review of criminal justice, including the assessors who will provide an independent element in the review.
On 22 May, the people voted overwhelmingly to endorse the Good Friday agreement. I commend that endorsement to the House as we undertake our clear duty to follow the will of the people and implement the agreement in the weeks and months ahead.

Mr. Andrew MacKay: I am sure that the Secretary of State was correct to say that the referendum


was a remarkable milestone in the history of Northern Ireland. The turnout of more than 81 per cent. frankly shames the rest of the United Kingdom, where the participation rates in recent elections have been much lower.
There is absolutely no doubt that the overwhelming majority of people in Northern Ireland are anxious to show their democratic credentials and yearn for a lasting settlement and an end to the troubles. The result for the yes campaign was equally significant. By any reasonable statistical judgment, it was a vote in both communities for the agreement, and we must never let critics of the agreement say anything else, as it would be a plain untruth.
Looking forward to the assembly elections, may I ask the Secretary of State for slightly more detail about the forthcoming legislation which will be introduced before the elections are held? When I was campaigning for a yes vote in the Province with my right hon. Friend the Leader of the Opposition, it became very clear indeed, particularly in the final few days of the referendum campaign, that a significant number of moderate, ordinary, decent people in both communities finally decided to vote yes only when the Prime Minister had given them clear, unequivocal assurances that decommissioning and the renunciation of violence would be incorporated in the legislation on early prisoner release and setting up the assembly, with particular reference to members of the assembly taking ministerial or Executive office. It would be a tragedy if those assurances were not fully incorporated in the legislation to be introduced shortly. I should like to be certain that they will be. If they are not, I fear that more politicians who will not act positively will be elected to the assembly, which would be a great pity and not in the interests of the people of Northern Ireland.
The Secretary of State was right to announce that the Government wish in no way to interfere in the assembly elections. Her Majesty's Opposition share that wish. However, this is a time for great sensitivity. I wonder whether the Secretary of State was right to have invited Sinn Fein-IRA leaders to the Hillsborough reception. Such acts will destabilise the Unionist electorate and community. We have been fortunate that, for wrong and inexcusable reasons, Mr. Adams and Mr. McGuinness have declined the invitation. I should like assurances that there will be no further such insensitive acts before the elections, which could bring about the wrong result.

Marjorie Mowlam: I appreciate the hon. Gentleman's opening comments about the reasonable statistical judgment that there was a majority in both communities in favour of the agreement. We have done a fair amount of work on that and agree whole-heartedly with his interpretation. We also welcome his support for non-interference by Her Majesty's Government or Her Majesty's Opposition in the Northern Ireland elections. However, if individual Members of Parliament from either side want to go over, that is a choice for them. It is not up to us to dictate to other Members.
The hon. Gentleman's point about decommissioning and holding office is central, but I should like to deal first with his more minor point about the garden party later this week. It is normal to invite representatives of all

political parties to the garden party. All those who signed up to the Good Friday agreement have been invited. That is the only just way to proceed. We cannot expect people to participate together in the assembly if we judge them by different standards. More than 90 per cent. of the invitations this year went to people from the national health service, because the 50th anniversary of the NHS is being celebrated at the garden party. We have kept the arrangements fully under discussion with all concerned parties. I was well aware of the sensitivities among the families who have been victims of the violence, including the royal family. Had matters turned out differently, as the organiser of the event I would have ensured that nobody suffered any further hurt or pain.
The hon. Gentleman also raised the more substantive point of the Prime Minister's comments on 14 May, outlining the factors that are crucial to moving the process forward. My right hon. Friend has made it clear that there must be a genuine and unequivocal commitment to peace by those participating in the assembly. We shall make an overall judgment based on those four factors, which I listed in my statement, so I shall not bother the House by repeating them all. One was about ensuring the full co-operation of the parties with the independent commission on decommissioning to implement the agreement. Our judgment will be based on consideration of all the factors. I cannot prejudge that decision, but I assure the hon. Gentleman that his point will be answered in the settlement Bill and the prisoners Bill. As he well knows, there are arrangements in the agreement for excluding from office those who are not genuinely committed to peace.

Mr. David Winnick: Rather than dwelling on invitations to garden parties, is it not far more important to dwell on the bigger picture—the fact that the attempt by terrorism, murder and violence to force Northern Ireland out of the United Kingdom has been defeated by democracy, something in which the whole House rejoices? Are there not two dangers? The first is of terrorist breakaway groups from the IRA, and possibly from loyalist murder gangs, that do not accept the ceasefire and would do their utmost to destroy the democratic decision of the large majority in Northern Ireland. Secondly, although I understand and appreciate why the Secretary of State does not want to intervene in the election for the assembly, would it not be extremely unfortunate if anyone elected were elected only on the basis of trying to wreck the agreement, and therefore, in his own way, undermined what the majority of people in Northern Ireland agreed to last week?

Marjorie Mowlam: I thank my hon. Friend for his comments. It is important that we act in a fair and just way in the weeks and months ahead as we try to put into practice the plans for building peace and ensure that the process begins to work. I agree that we should focus on the fact that democracy has spoken. The people in Northern Ireland—71 per cent. of them—have said that, by consent, they want to find a peaceful way forward. That is the answer to the terrorist breakaway groups, whether they be the Irish National Liberation Army, Loyalist Volunteer Force, Continuity IRA or the 32 County Sovereignty Committee. They in no way represent the people of Northern Ireland or of the Republic. There is a wish to find another way forward. I assure the House that terrorist breakaway groups that


continue to function will be treated very firmly by both the Governments in the north and in the Republic, working together where necessary to ensure that such groups do not destabilise the process, as they are clearly intent on doing. We will do our best as much as possible to ensure that destabilisation does not take place.
In the elections on 25 June, we would obviously want people who are committed to taking forward the spirit of the Good Friday agreement into the assembly. The election is the people's choice; it is their voice. The electorate in Northern Ireland are very savvy, they know how the electoral system works and I have faith in them.

Mr. Phil Willis: The Liberal Democrats very much welcome the decisive referendum on 22 May. We congratulate the Secretary of State and her Ministers on the job of work that they did, as we do former Ministers on their work in bringing about the historic decision. We also welcome the fact that legislation, especially to deal with prisoners, will be brought before the House sooner rather than later. That will be a litmus test of whether the entire agreement will be followed through.
I spent last week partly in Northern Ireland and partly in the Republic of Ireland. As the concert at Stormont in Belfast was going on, I was speaking to people who voted no. We must remember that about 28 or 29 per cent. of the people of Northern Ireland voted no. It is crucial that we do not forget that large number, the majority of whom are not terrorists, bombers or wreckers but people who have genuine worries about the future of their Province. What efforts will the Secretary of State and her Ministers make to ensure that those people are not excluded from the future but are brought into the fold and can play a positive part in what we hope will be a very successful transition to peace in Northern Ireland?

Marjorie Mowlam: I thank the hon. Gentleman, and would add to his list of thanks gratitude for the support and help that the Liberal Democrats have given. I avoided giving a great thank you in my statement because it took so long last time. The people who have put in the work know who they are. Their collective effort has brought us to where we are today.
I agree that it is welcome that legislation on prisoners is before the House sooner rather than later. It is in the agreement that it will be in place by the end of June. We must not ever forget that we are dealing with a package and cannot cherry-pick. Some people do not like some bits and others do not like other bits, but we must treat the agreement as a package in order to be able to keep the whole thing together. That is what the parties signed up for and that is what we must keep on the table.
I agree with the hon. Gentleman's last point—the same point was made by the hon. Member for Bracknell (Mr. MacKay). There are many who voted yes for peace, and there are those who have concerns—there is no doubt about that. The Prime Minister, when he was across on 14 May, did his best to reassure those who were seeking more information.
Like the hon. Gentleman, I would like to build bridges, as we did during the referendum. We funded all the parties during the referendum to put their case because we did not want to discriminate against anyone, whatever their position. We are talking with all parties about the

elections. We will do all we can—not just with the parties, but with the people—to answer questions and to ease fears, because unless we can allay those fears, trust and confidence will not exist for the future.

Mr. Peter Brooke: I congratulate the people of Ireland, in both parts, on the clarity of their decision, and I congratulate the Government on their conduct of the referendum. Does the Secretary of State agree that, during the referendum, the two Governments made at least one decision that might have had serious adverse consequences? I speak delphically, but I think she knows to what I refer. Will the right hon. Lady acknowledge that, during this next difficult year, there will not be much margin for similar errors to be made?

Marjorie Mowlam: I do not know whether the right hon. Gentleman prefers to be seen as the father or the grandfather of this agreement, but his input eight or nine years ago created what happened early this year, and it took place, in many ways, thanks to his initial work and the risks that he took.
The releases, to which the right hon. Gentleman was referring, were different in nature. One was not ours—it was the Irish Government's. We have made releases to try to bring the process forward. The other point is that those releases are part of an overall package of prisoner compassionate and temporary leave that was put in place by the Government of which the right hon. Gentleman was a member. I had to decide whether to change the system on this occasion because of the individuals concerned, bearing in mind the impact of their release on the prisons and the impact on individuals of changing the system for external reasons. I thought that it was safer to stick with a scheme that had been in place for many years.

Kate Hoey: The Secretary of State will be aware of the vital role played by the Prime Minister in the referendum campaign, particularly in the last few days. She will be aware particularly of the personally written pledges he gave when he spoke to an audience in Coleraine a couple of days before the vote. How will these pledges be incorporated into the Bill, as that is what the people of Northern Ireland thought was going to happen?

Marjorie Mowlam: I fully concur with my hon. Friend on the central role of the Prime Minister in the last days of the referendum campaign. On the personally written pledges which she and I saw in Coleraine, I repeated them in the House today and I listed them as the four factors. I have said that the four factors are part of the overall agreement and will be written into the Bills on prisoners and on the settlement.

Sir Brian Mawhinney: The right hon. Lady is absolutely right to propose legislation on the release of prisoners, however distasteful that will be to a lot of people and however inevitable it is, given Irish history. As she prepares the Bill, will she give a moment's thought to the horror of more than 3,000 murders in the past 25 years? Within that horror, will she recognise that some of the murders were so horrible that the sense of revulsion swept across the community, irrespective of political or religious view? Would she be willing to give herself reserved powers in the Bill so that,


after consulting—perhaps on a bipartisan basis—it might be agreed that there are certain people on both sides of the community whose deeds were so dastardly that they ought not to be part of the release process?

Marjorie Mowlam: I give more than a moment's thought to the victims, and, as the right hon. Gentleman knows, we set up the Bloomfield commission many months ago to consider what responses we could make on a much larger scale than previously. It is difficult for everyone to cope with change, but victims' families will find it even harder—we want to ensure that they receive fair treatment in the consideration of the issues. I have appointed a Minister to ensure that the commission's recommendations are taken seriously, pushed through the system and delivered, so that the victims' families see a change in the policies that we adopt.
I thank the right hon. Gentleman for what he said in the first part of his question. There is no doubt that the release of prisoners has been an on-going factor. He and I know—as do many Conservative Members—that that process was started in 1995 under the previous Government, and that 240 prisoners have already been released early, some of whom are those horrific people to whom he refers. Half those who will be given accelerated release under the proposed scheme would be out even if we made no changes. Safeguards have been built in—I know that the right hon. Gentleman has considered them—such as the revocation of licences if there is a breach in the commitment to the ceasefire and to a peaceful way forward. Moreover, particular conditions apply to lifers.

Mr. Harry Barnes: I welcome the neutrality of my right hon. Friend the Secretary of State on the election, but I think that we are all aware of the areas on which her glint of approval will fall. It is appropriate that the Government should not adopt a particular attitude, as there is no Labour party in Northern Ireland; if there were, the Government's approval might appropriately be given to it. Will the Republic adopt a similarly neutral attitude to the election?
Some of us, as Back Benchers, have the advantage of not being bound by the self-denying ordinance and can involve ourselves in the arrangements, although we should consider whether it would be tactically wise to do so, or whether people would be offended by our involvement. Nevertheless, I believe that we should all support the parties that are with the agreement 100 per cent. It is by no means the case that all those who voted no will not accept the decision that was made in the referendum—it is perfectly possible for people to vote one way, to find that the result went against them and then to operate in the new framework.

Marjorie Mowlam: It was exactly my hon. Friend of whom I was thinking when I said earlier that some individuals would want to do their own thing. I find it difficult, if not impossible, to speak for the Republic, and I should not speak for another Government, but it would be fair to say that they have shown sensitivity to the issue—I do not think that there will be any difficulties on that front.
I agree with my hon. Friend's final point—some who voted yes may vote in the elections to the assembly for a party that said no, and some who voted no may vote for a party that said yes. That is what I mean when I say that it is the people's choice and decision.

Mr. Tom King: Will the right hon. Lady accept my congratulations on the roles that she and the Prime Minister played in securing the significant achievement that we are recording today, which is another important step in the long march towards a happier Northern Ireland and island of Ireland? She said that it is not for her to speak for the Republic of Ireland, but does she recognise the significance of the fact that a referendum was held on the same day on, in effect, the same issue in both parts of the island of Ireland? Those people who have said that the people of Ireland have not been able to express their will since the 1918 election no longer have a hiding place—let no one forget that that excuse is now totally expunged from a valid record of Northern Ireland events.
Will the right hon. Lady confirm that she made a slip of the tongue in saying that 71 per cent. of people voted for peace? I know that she meant to say that those people voted for the agreement. I strongly endorse the remarks of hon. Members that many of the people who desperately want peace but did not have the conviction to vote for the agreement can be won by the Government's confidence and resolution in the weeks and months ahead.

Marjorie Mowlam: I thank the right hon. Gentleman for his contribution, partly because I know what a tough time he had in doing my job—it was not easy in those days, so I appreciate his comments. The consent of the majority of people north and south is historically crucial. I accept his slight rebuke, in that people voted for the agreement, but I believe that the agreement was the best option for getting all the parties together. Agreement on the basis of consent has given us a chance that we have not had for years, and I appreciate the support that he has given today.

Dr. Julian Lewis: May I add to the congratulations to politicians on both sides of the House my congratulations to the armed forces and to the police? If those people had not put their lives at risk—and, in many cases, lost their lives—in manning the front line for so many years, the men of violence would not have recognised the importance of making peace.
I re-emphasise a point on prisoner releases that I made during one of the Secretary of State's previous statements and which she seemed partly to acknowledge. Does she agree that one of the reasons why men of violence from both sides of the divide have been keen for the agreement is to secure the release from gaol of convicted murderers? Does she accept the importance of retaining the incentive to prevent such people from returning to violence? If it is proposed that convicted killers should be let out en bloc on licence, will she confirm that, if the peace agreement breaks down, they will be put back in gaol en bloc, and not only if they, as individuals, are caught committing another crime?

Marjorie Mowlam: May I set the record straight in a number of ways? There are no releases en bloc; each case is considered individually by an independent commission.


If there is any breach in the conditions on which a prisoner has been let out, the licence will be revoked and the prisoner will be put back in gaol.
The agreement will work only if all the parts move together. There is no general release of prisoners at one point in time. To build trust and confidence between the groups, we must move in parallel on the different elements—prisoners, decommissioning, the north-south ministerial council and the New Northern Ireland Assembly—if we are to make progress. If we do not move on one element, the agreement will not work. That is why the four factors to which I referred in my statement are central to this process, as will be reflected in the forthcoming Bills. Those four factors encapsulate the essence of the six pledges that the Prime Minister made in Coleraine.

Mr. Tim Collins: Given the importance of the commitment, which the Secretary of State repeated today and which the Prime Minister originally made, that participation in the Executive of the Assembly will be contingent on full co-operation in decommissioning, will she confirm that, for that assessment, she will continue to treat Sinn Fein and the IRA as the same organisation?

Marjorie Mowlam: I have already said that Sinn Fein and the IRA are inextricably linked. I also said today that the agreement sets out arrangements for excluding people from office if they are not genuinely committed to peace. The Prime Minister has made it clear that if the arrangements are not working, we shall support changes to them. The overall judgment on whether parties are genuinely committed to peace will be based on the range of factors set out by the Prime Minister, which will, as I said, be given legislative expression in both Bills that will come before the House later this year.

Crown Prosecution Service

The Attorney-General (Mr. John Morris): With permission, Madam Speaker, I should like to make a statement.
The report of the review of the Crown Prosecution Service has today been placed before Parliament and published. I set up the review on 12 June 1997, under the chairmanship of Sir Iain Glidewell, to examine the organisation and structure of the CPS and to consider what changes might be necessary to provide for more effective and efficient prosecution of crime. Its terms of reference reflected the widely held concerns expressed about the Crown Prosecution Service in the Labour party paper "The Case for the Prosecution", published shortly before the election.
The report concludes that the CPS has not achieved the improvement in the effectiveness and efficiency of the prosecution process that was expected to result from its establishment in 1986. It recognises a number of reasons for that, extending back to the earliest days of the service, and recommends significant change in the structure and form of management of the CPS. It also makes clear, however, that the CPS has achieved much in its short life in establishing itself as a cohesive, national and independent prosecuting service. Moreover, the review team is certain that it can overcome its problems and that it has the potential to become a lively, successful and esteemed part of the criminal justice system. Sadly, it adds, none of those adjectives applies at present to the service as a whole.
The report—which, in large measure, confirms the judgments that we formed in opposition—sets out an agenda for an organisation that is less centralised and in which lawyers spending less time on management and more on prosecuting. Our paper "The Case for the Prosecution" covered only one, but a very important, facet of the Government's programme of reforming the criminal justice system. That programme includes improving the management and organisation of the magistrates courts system, changes in the youth justice system and proposals for speeding up justice generally.
The core proposal for the CPS—a national headquarters setting clear standards and policies, but with implementation effected by better-run and more local organisations enjoying real autonomy—is fully in line with the Government's approach on a range of issues. While the Government are keen to see toughly audited targets for performance and priorities, they also want the professional to be left to get on with what the professional does best.
The report endorses the Government's decision, announced in May last year, to divide the CPS into 42 areas coterminous with police areas, and recommends that the reorganisation needed to give effect to that decision be used as an opportunity for a genuinely new start for the service.
The report is comprehensive in its analysis and recommendations. I shall mention a few highlights. It proposes that each of the new areas should be headed by a chief Crown prosecutor. The 42 chief Crown prosecutors will be crucial to the success of the new CPS. They must be people of stature in the local community


who are recognised by local people as their chief prosecutors. They must be able to stand on equal terms with the chief constable, the local judiciary and other key players in the criminal justice system, and they must be recognised as being responsible, with them, for the effective delivery of criminal justice in the area.
The report makes recommendations aimed at ensuring that staff in the CPS should be allowed to get on with their core activity of prosecuting and be released from the burden of management. Moreover, it recognises the need for a better career structure for the staff of the service. The report proposes a radical and far-reaching reorganisation of the CPS. It proposes that the role of headquarters should, in addition to some casework responsibilities, be focused on core functions of setting the national framework and resourcing and monitoring the areas, and that a chief executive, who would rank second in the organisation to the Director of Public Prosecutions, should be appointed. That individual would be responsible to and work closely with the DPP, but would relieve him or her of the great bulk of managerial and administrative work.
The report's recommendations are intended to enable the CPS to handle cases in magistrates courts speedily, while devoting greater effort to more serious cases in both magistrates courts and the Crown court. It recommends that the CPS should take over the conduct of a prosecution immediately after the police charge the defendant and proposes that some support functions of the police service and the CPS, which often involve substantial duplication, should be undertaken by an integrated unit, staffed by a mixture of CPS lawyers and caseworkers assisted by police officers attached to the unit. The unit would prepare and deal with many straightforward cases in their entirety. These are innovative proposals which will need to be considered with special care.
The report also deals with the role of central casework—the section of the CPS that deals with very serious and sensitive cases from all over the country, such as terrorism and cases involving serious allegations against the police. The report describes a series of long-running problems in that section which are now being addressed. It endorses the need for realistic staffing, external recruitment, better training and improved casework audit procedures. It also recommends that central casework should not be treated as if it were like a geographical area, but should be incorporated into headquarters, where the unique nature of the work done and the need for special expertise can be recognised.
The Glidewell proposals add up to a real challenge, not only for the CPS but for the Government. We must examine them in the context of our existing initiatives. The review team's report contains much that accords with the Government's approach. In particular, it recognises the need for the agencies that make up the criminal justice system to have shared and mutually reinforcing objectives. It recognises that the problems of the CPS cannot be viewed in isolation from those of the other agencies that make up the criminal justice system and that the improvements to the system that are so urgently required will come not just from improving the individual parts, but from ensuring that the various agencies involved operate together better. That approach is fully in accord

with the Government's approach in setting up the cross-cutting spending review of the criminal justice system.
The Government fully accept the need for change in the CPS. We intend to lose no time in starting the process. A first major step will be the selection of the 42 chief Crown prosecutors, a programme put into abeyance on the advice of the review team. The new DPP will proceed with that, once in post.
The announcement by the Director of Public Prosecutions on 20 May 1998 of her intention to stand aside before the end of her contractual period so that her successor can be appointed to drive forward the necessary change is a generous move, reflecting her commitment to the interests of the service. I pay warm tribute to Dame Barbara Mills for some nine years of public service, first as Director of the Serious Fraud Office and currently as DPP. In both cases, she has provided strong leadership, and her contribution will long be valued.
The report contains some 75 recommendations covering a wide range of issues. The Government accept the thrust of its proposals for reordering CPS priorities to focus more on the core business of prosecuting, greater separation of management from legal work, greater autonomy for the areas and better prospects for staff. We accept the recommendation for the appointment of a chief executive. Mr. Mark Addison has been appointed and will take up his appointment within a matter of days. Other recommendations relating to the more detailed internal management of the CPS will be for the chief executive to consider as one of his first steps.
A number of the recommendations affect the responsibilities of other Ministers, notably my right hon. Friend the Home Secretary and my noble and learned Friend the Lord Chancellor. Decisions on those recommendations will be taken in consultation with them. It is important that our views be informed by contributions from as wide a range of sources as possible. Therefore, I invite interested organisations, practitioners and others who may be affected by, or otherwise wish to comment on, the proposals in the report to forward their views to me or my ministerial colleagues.
The Government will publish a formal response to the recommendations, setting out our response to each recommendation, whether it will be implemented, and if so how. A plan of action will also be drawn up and published.
The quality of the report shows the hard work and talent of the review team: Sir lain Glidewell, Sir Geoffrey Dear, Mr. Robert McFarland and the secretariat to the team. I could not have expected more. I extend to them on behalf of the Government the warmest possible thanks.
Finally, I should like to pay my own tribute to the staff of the CPS. The report recognises in many passages their commitment and professionalism. I have seen that myself during visits, both before and after the election, to CPS branches. There is a strong desire for change in most, if not all, of the CPS. I know that the staff of the CPS are willing and able to take their proper place in the criminal justice system. I also know that they are the most precious resource of the CPS. They have undergone a period of intense and demoralising uncertainty during the review. I believe that today marks the beginning of a new way forward for the CPS and its staff. In the making of


the decisions for the future, the staff must be consulted. Their interests must be considered and implementation must be phased so as to minimise disruption to them.
I have no doubt that the talent, enthusiasm and commitment exist to permit the CPS to take its rightful place in the criminal justice system. Change is needed. The work of the review team provides us with a firm basis on which to make decisions for the future. While there is more work to be done, I believe that the process has now well and truly begun which will permit the CPS to become a more effective and esteemed national prosecuting body.

Sir Nicholas Lyell: First, we join the Attorney-General in thanking Sir lain Glidewell and his team for the obvious hard work that has gone into the report. I was glad to hear the Attorney-General's tribute to the Director of Public Prosecutions, Dame Barbara Mills, and I hope that he will not think it out of order if I express some regret that the spin doctors that the Labour party often so effectively employs in other fields were unable to prevent—or at least balance—the disgraceful hatchet job in The Sunday Times this weekend, which she did not deserve.
Does the Attorney-General agree that the key to the way forward is the close working together of the police, the Crown Prosecution Service, the Court Service, the judiciary and the probation service? For that reason, I am pleased to see the Home Secretary is sitting beside the right hon. and learned Gentleman.
The Labour party must be careful not to believe too much of its own propaganda. In its report before the election, "The Case for the Prosecution", much was made of the fact that crime had doubled and the number of prosecutions or convictions had dropped to a third. The impression was given that that was somehow the fault of the CPS. Does the Attorney-General accept that that is not and could not be the case? The CPS prosecutes the cases brought forward by the police and it prosecutes in an overwhelming proportion of those cases.
I am glad that the report recognises that there remains a strong need for a powerful central core to the CPS, which will need strong and effective leadership in the future. Can the Attorney-General tell us what is happening as regards the appointment of a new Director of Public Prosecutions? Will the post be advertised? From where is he seeking to find such a person? When does he hope to make the appointment?
Does the right hon. and learned Gentleman recognise that in appointing 42 new chief Crown prosecutors—one for each police area—he is to some extent substantially increasing a higher level of management? I do not criticise that, but does he recognise that the prime reason for focusing a chief Crown prosecutor on a police area is to emphasise that the police and the CPS have a joint responsibility and that it will take all the backing that the Home Secretary can give and that of chief constables—as well as anything that the right hon. and learned Gentleman can do—to enable a chief Crown prosecutor who, in many areas, has perhaps 30 lawyers and 100 support staff under his command to gain proper respect equivalent to that given to a chief constable, who has perhaps 1,200 officers?
On magistrates courts and the preparation of work there, if the CPS is to run effectively the administration support units that are at present run by the police,

does the Attorney-General agree that two things will have to happen? First, the CPS will have to be given the necessary resources. They will have to come out of the criminal justice budget, and the Home Office may have to give some ground in that respect. Secondly, there are 60 police officers for every CPS lawyer and one cannot conjure out of thin air lawyers to run the administration support units. They will need effective backing from senior police officers to ensure that the units deliver effective prosecutions.
Does the right hon. and learned Gentleman recognise that he is following the course that we were taking? I am glad that he and the Home Secretary are also following that course in seeking to speed up cases into magistrates courts, through the Narey report. Can the right hon. and learned Gentleman confirm that that will continue?
At least a year before the election, I saw some valuable studies in which e-mailing techniques were being used between the police, the CPS and the Court Service. Surely it should be possible to take that forward rapidly so that those three services can communicate better. I accept that information technology has been a bugbear for the CPS over the years. Does the right hon. and learned Gentleman agree? What will be done to improve that situation?
I welcome the fact that there are to be contributions from outside before the Government finally deliver their response, but can we now expect an early response? Does the right hon. and learned Gentleman accept that the report has been published six months later than he originally believed and led us to believe, and that there is little time to lose? Finally, can we expect a debate in Government time on this important subject before too long?

The Attorney-General: I shall try to deal with the right hon. and learned Gentleman's catalogue of questions. He started by mentioning what he described as a hatchet job in The Sunday Times. I, too, deplore that unnecessary personal attack on the Director of Public Prosecutions. I would not be responsible for allowing any spin doctor to do that. Indeed, the reverse would be true.
The right hon. and learned Gentleman may take a great deal of comfort on liaison with the police. Joint units are complicated and need to be carefully worked out, but they will require considerable discussion involving me, my right hon. Friend the Home Secretary, the Lord Chancellor's Department and the Association of Chief Police Officers. I believe that they are the right way to prevent one side blaming the other—a practice which used to prevail much more than it does now, but which I have experienced dozens of times in court. I want to bring that to an end.
I want high-calibre chief Crown prosecutors in each of the 42 areas. We will do away with the 13 areas set up in 1993, which were approved by the right hon. and learned Gentleman. Although some advantages have obtained from that reorganisation, including the welding of a better national system, Sir lain Glidewell and his team have found, perhaps with hindsight, that it was a mistake. Whatever the intention, the system resulted in each area headquarters becoming an extension of the principal headquarters. Real devolution has not taken place, which is the defect of the previous reorganisation.
The right hon. and learned Gentleman is absolutely right to say that resources have to be considered whenever there is a new arrangement regarding the police and the


CPS. If the CPS takes more responsibility for managing cases after charge, including warning witnesses, comforting victims and matters of that kind, I believe cardinally—I have believed it all the years I have been a Minister—that no decision should be taken on the transfer of departmental responsibility without a decision at the same time about resources. It is no good complaining years later about lack of resources; the decision should be taken at the same time, as we have all learnt from experience. I am determined that that will happen.
The right hon. and learned Gentleman takes particular interest in speeding up justice. The object of the new arrangements is to streamline cases to avoid overlap and duplication and to shorten lines of communication between the investigator and the prosecutor.
There are detailed proposals on information technology. The Government are considering better means of ensuring a closer interface between various IT systems. When I was a young Minister in 1964, there were 12 gas boards and 12 electricity boards, and I took no comfort from the fact that each ordered its own computers. The situation has not changed a great deal, but we hope to do something about that, if very late in the day.
On the right hon. and learned Gentleman's point about our reporting six months late, I must say that we promised in "The Case for the Prosecution" that the report would be completed within a year of our taking office. Today is 1 June, so we are only a month after that date. I had hoped that it would be done earlier, and have from time to time indicated that it would be done earlier, but I do not believe that the right hon. and learned Gentleman has a great deal of room for complaint that we have missed the date by a month. Despite our hopes that it would be done more quickly, it was necessary that Sir lain and his team should carry out full consultation, and they have done so.
The right hon. and learned Gentleman asked for a debate in Government time. He knows that that is a matter for my right hon. Friend the Leader of the House, who will have heard his words.

Mr. Chris Mullin: I endorse my right hon. and learned Friend's tribute to Dame Barbara Mills. Whatever has gone wrong in the Crown Prosecution Service, it would be quite wrong to blame her.
Has obstruction by the police played any part in CPS difficulties? My right hon. and learned Friend will recall that the police resolutely opposed the independent prosecution service when it was first set up.
Would the CPS's problems be alleviated if its lawyers had rights of audience in the higher courts? When Dame Barbara Mills last came before the Home Affairs Committee, she said that the Bar Council was being obstructive on that.
Does my right hon. and learned Friend have any plans to deal with returned briefs, a problem endemic in the criminal justice system? Lawyers discover, often at the last moment, that something more interesting or immediate has turned up, which leads to severe difficulties.

The Attorney-General: I am grateful for my hon. Friend's remarks because, as Chairman of the Home

Affairs Committee, he keeps a close watch on developments. When the CPS was set up there were difficulties between the police and the new organisation, but the whole idea of the new organisation was to separate investigation from prosecution. The independent reviewing of cases was the main reason for creation of the CPS. There were bound to be difficulties, but, in my experience the situation has improved enormously over the years. We want to build on that, and closer liaison and better machinery—the right hon. and learned Member for North-East Bedfordshire (Sir N. Lyell) attaches importance to it—will help us get over any remaining difficulty. There is a real need to speed up prosecutions as effectively and efficiently as possible. I hope that the Government can find the machinery to do so in these recommendations.
Sir Iain Glidewell and his team have commended what has already been done on limited rights of audience for the CPS. Further rights are a matter for my noble Friend the Lord Chancellor, who is concerned about that point.
The Home Affairs Committee, the National Audit Office and Sir lain have all written a great deal on the return of briefs. The CPS will have to consider that issue carefully and, although I do not detract from Sir lain's comments, there is a need for great improvement.

Mr. John Burnett: We welcome the Glidewell report and congratulate Sir lain and his team. We hope that we will soon have an opportunity to debate this important matter in the House, but welcome the establishment of 42 areas that will have significant autonomy.
The Attorney-General will agree that justice must be seen to be done, and be open and accountable. When the CPS decides not to prosecute, will he ensure that it gives its reasons? We understand that the CPS has to work closely with the police, but it is vital that it should be independent of the police. That is a difficult balance. What safeguards does he propose in sensitive areas, such as prosecutions of police officers? How much work is being done by unqualified staff at the CPS? Is he satisfied that there are sufficient experienced, legally qualified staff not only to cope with the burden of cases but to do so efficiently and expeditiously? More than anything else, that would restore the morale of the CPS and the public's faith in it.

The Attorney-General: I have already dealt with the question of a debate.
I welcome the hon. Gentleman's comments on the areas, which we regard as important. That is why we decided on the matter within weeks of taking office. My right hon. Friend the Home Secretary and I attach considerable importance to having chief constables responsible for areas that are coterminous with those of the chief Crown prosecutors. I believe that that is an important step.
Sir lain and his team considered decisions not to prosecute, or to downgrade an offence, closely. Such decisions are of public concern, and many hon. Members—I for one—receive letters from constituents on them. Unfortunately, the statistics and the evidence are not clear. The team said that there are suspicions that downgrading happens. It varies in respect of particular offences and of different areas. These are matters of


concern, and further work needs to be done. As the hon. Gentleman said, it is vital that justice is seen to be done. Where someone has committed, or is alleged to have committed, an offence, he should be charged with an appropriate offence.
There is considerable emphasis in the report on unqualified staff, and qualified staff who hope to exercise their rights of audience in the Crown court, having adequate and proper training. I believe that they have an important role to play if they have such training.

Mrs. Gwyneth Dunwoody: My right hon. and learned Friend knows that the House feels that this report is long overdue. The service had become constipated, incompetent and sadly lacking in leadership. The sooner action is taken, the better. Can he assure us that the reorganisation back to local units that are truly responsive to local needs will be undertaken as soon as possible? Will there be an audit of the quality of casework undertaken by those units? Above all, can he assure us that the public will no longer be subjected to cases being allowed to drag on for five years before they are finally lost?

The Attorney-General: I know of my hon. Friend's concern with a particular case. I have written to her substantially about her very real concern. She knows my interest in the matter.
The intention is to implement the report as rapidly as possible. That is what we did by setting up the 42 areas and what I do today by announcing the chief executive. I did not deal with this in my reply to the right hon. and learned Member for North-East Bedfordshire (Sir N. Lyell)—I should have told him that, in the summer months, the new Director of Public Prosecutions will be appointed by open competition, following advertisement. We hope that he or she will be in place by the autumn.
I assure my hon. Friend that all the other facets of reorganisation will be done as soon as possible. We have taken all the steps possible, but I was anxious that we should have the evidence before moving further than establishing the 42 areas. Sir Iain has provided me with the evidence, chapter and verse, so that I can go on, in concert with my right hon. Friends, to ensure that we deliver the parts of the Glidewell report that we deem, on further consideration, to be right and proper. It is a very detailed, careful and well worked out report.
There are proposals for expanding and enhancing the Crown Prosecution Service inspectorate by having a lay chairman and lay members on the committee that will oversee it. We attach importance to that, as we did in opposition.

Mr. Elfyn Llwyd: The report has much to commend it. I welcome the references to integrated units. The Attorney-General mentioned that in the past there were—I believe that they are still current—some areas where relations between the police and prosecutors were not as good as they should have been. Implementing the integrated units will go far to ensure better co-operation and better quality of service all round. I was pleased by the report's reference to prosecutors coming in earlier in the process, thereby applying the prosecution guidelines earlier in the process. That, too, has much to commend it.

The Attorney-General: The hon. Gentleman has considerable experience in the criminal field—

professionally, of course. [Laughter.] I knew that I would do that; it was not intended. Both as a solicitor and now as a barrister, he is well acquainted with the problems in the service. I accept and value his comments. There is a need for integration. The interface is better, but there is a need for improvement. Hence Sir lain and his team have set out distinct proposals that someone should take over the process of prosecution once the charge has been preferred. I hope that it will be done jointly between the police and the CPS, but the exact machinery needs to be considered carefully. I hope that it will achieve the aims that the hon. Gentleman has in mind. There is a need for improvement if we are to have speedy justice. That underlines his proposal, which I must reserve the need to consider, that the CPS, should take charge, if we approve of the proposal, of prosecutions earlier. I hope that that reassures him.

Mr. Barry Jones: My right hon. and learned Friend was a distinguished Secretary of State for Wales in previous Administrations. How does his statement point to a much better service in Wales, especially in north-east Wales, where it has received criticism? Recent changes in magistrates courts have been controversial. I hope that the changes that he presages today will be less controversial. Can he confirm that Wales will not have American-style district attorneys?

The Attorney-General: Perhaps I may kill off that expression once and for all. I have no intention of having American-style district attorneys. I do not know where that came from and I am not the parent—or grandparent—of the description. They have quite different responsibilities. Some, if not all, district attorneys take part in the investigative process as well, and some are elected. I do not propose to go along that road any more than with the election of judges, which also takes place in many parts of the United States.
There are four police areas in Wales and there will be four chief Crown prosecutors in Wales. I am confident that the system in Wales will rise to the needs of the situation in exactly the same way as will the system in England.

Mr. Ross Cranston: May I congratulate my right hon. and learned Friend on the appointment of Sir Iain Glidewell so soon after the election? It was a key manifesto commitment and he implemented it quickly. Knowing Sir Iain, I am sure that his is a full report, but may I raise one matter that does not seem to have been dealt with so far—excessive bureaucracy? My casual observation in court suggests that it is an important problem and when I visited my local CPS in Wolverhampton, the staff seemed to have files running out of their ears. Does Sir Iain's report address that important problem and make recommendations about dealing with the excessive paperwork?

The Attorney-General: I agree with my hon. Friend—it was certainly my impression when I toured a few of the CPS branches before the election that lawyers would complain that far too much of their time was taken up in form filling. How far those forms are read at the end of the day I know not, but the Glidewell report makes it clear that 400 of the senior prosecutors—the senior lawyers in the CPS—devote only a third of their time to case


advocacy and the preparation of cases, so there must be something wholly wrong. Sir lain has said—I commend that part of his report with great pleasure—that much greater autonomy should granted to the chief Crown prosecutors in each area and that while, obviously, the headquarters in London should have responsibility for standards, ensuring that resources are available and monitoring, there should be a great slimming down of unnecessary bureaucracy in a system that is undoubtedly over-centralised. I am confident that we can achieve that.

Mr. David Lock: I am grateful to my right hon. and learned Friend for bringing the report before the House. As a former barrister who used to prosecute for the CPS in magistrates courts, I know not only that the amount of paperwork generated by each case is substantial, but that the law is complicated and the job that prosecutors do is extremely difficult. Does my right hon. and learned Friend agree that lawyers are better being lawyers and managers are better managing? I hope that he can tell us that the Glidewell report will ensure that, in future, lawyers and managers will each do what they do best and that we will get a better prosecution service as a result.

The Attorney-General: I am grateful to my hon. Friend for his remarks. The main ethos—the main thrust—of the Glidewell report is to ensure that lawyers do what they do best, which is prosecuting, and that managers play their part, which is an equally important part of the whole. After all, some people become lawyers because they want to practise the law, not because they want to practise management. My hon. Friend is right;

there is an excessive amount of paper. Although it has been slimmed down over the years, there is more work to be done.

Mr. Andrew Dismore: I welcome my right hon. and learned Friend's commitment to employing a chief executive for the Crown Prosecution Service. That mirrors recent experience in private practice in large solicitors firms, which have been effective in appointing chief executives, so freeing lawyers' time for lawyering rather than managing. Allowing lawyers to do lawyering is probably one of the best ways of raising morale in the CPS, because it allows them to get on with the job for which they were trained. Does my right hon. and learned Friend agree that unqualified CPS staff are every bit as valuable as qualified staff and that, in many cases, unqualified staff with a lot of experience can do the job as well as, if not better than, qualified people?

The Attorney-General: The chief executive will play an important part in the future administration of the CPS and, as I said, I hope that he or she will be in post before the end of the week. Undoubtedly, and regrettably, morale has been low. That problem has been ignored over the years. Surveys that have been carried out—disagreed with by some and agreed with by others—have a common ground of highlighting low morale in the service. I believe that our proposals will be warmly welcomed.
As regards unqualified staff, I am old enough to remember the senior managing clerks who used to play a formidable role in the Inner London quarter sessions and all the other courts; they knew far more about the law and practice than many lawyers and I attached great importance to their role. There is an important role in the CPS for unqualified staff with proper training and standards. I want to ensure that both go hand in hand.

Orders of the Day — PETROLEUM BILL [LORDS]

Read a Second time.

Motion made, and Question put forthwith, pursuant to Standing Order No. 58 (Consolidation Bills), 
That the Bill be not committed. —[Mr. McFall.]

Question agreed to.

Read the Third time, and passed, without amendment.

Orders of the Day — AUDIT COMMISSION BILL [LORDS]

Read a Second time.

Motion made, and Question put forthwith, pursuant to Standing Order No. 58 (Consolidation Bills), 
That the Bill be not committed. —[Mr. McFall.]

Question agreed to.

Read the Third time, and passed, without amendment.

National Lottery Bill [Lords]

As amended (in the Standing Committee), considered.

New clause 2

ADDITIONALITY

'.In Section 25 of the 1993 Act (Application of money by distributing bodies) after subsection (4) there shall be inserted—

"(5) A body shall distribute any money paid to it under section 24 only in areas that are not the responsibility of government.".'. —[Mr. Spring.]

Brought up, and read the First time.

Mr. Richard Spring: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. Michael J. Martin): With this, it will be convenient to discuss the following: New clause 3—Additionality (No. 2)—
`. In Section 25 of the 1993 Act (Application of money by distributing bodies) after subsection (4) there shall be inserted—
(5) A body shall not distribute any money paid to it under section 24 where it would substitute for funds that would otherwise have been provided by conventional public expenditure.".'.
Amendment No. 7, in clause 7, page 8, line 37, leave out 'such'.
Amendment No. 2, in page 8, line 39, leave out from `environment' to end of line 40.
Amendment No. 3, in page 9, line 9, at end insert—
'(5) The New Opportunities Fund shall be a body for the purposes of sections 24 to 27 and 34 of the 1993 Act.'.
Amendment No. 4, in page 9, line 10, leave out from beginning to end of line 30.

Mr. Spring: In Committee, we had the extraordinary experience of seeing Labour Members voting, again and again, against their own manifesto commitment. The irony appeared to be lost on them, which is a reflection of their attitude toward their manifesto.
The new clause would bring additionality to the heart of the Bill. Of all the important issues relating to the Bill, it is on additionality that there is a huge gap between what the Government avow and what they are actually doing. The Government claim—no doubt we shall hear it again today—that they remain committed to the arm's-length principle, but, by any objective standard, that is manifestly not true. We shall clearly outline that failure in Government thinking this afternoon.
The Government claim to be holding to the principle of additionality, but, again, that is demonstrably not true. The proposals to deprive the original good causes of a share of the proceeds of the lottery are designed to enable the Government to divert money to finance their failing political agenda. That is a shabby piece of opportunism, made worse by the Government's hypocrisy and their determination to maintain that they are not breaking the principle they so vigorously sought to defend when in opposition. In Committee, the Government rejected Opposition amendments that would have clearly enshrined, without a shadow of doubt, the principle of additionality. The Minister rejected them, saying that


although the Opposition had made a reasonable attempt to define additionality, we had not been successful in doing so. That argument lies at the heart of the Bill.
We remain deeply concerned about the precedent set by the Government's decision to divert money from the good causes for which the lottery was originally set up to matters such as health, education and, eventually, environmental projects. We are trying again to persuade the Government of the virtue of our thinking and the importance of maintaining the integrity of the national lottery. We are trying to persuade them to incorporate a requirement to adhere to the principle of additionality in the Bill, in an effort to prevent the Bill from being a form of voluntary taxation and, indeed, an outpost of the Treasury. I trust that, this time, on further reflection, the Minister will not so airily dismiss the points made by the Opposition.
The Prime Minister's commitment to additionality was made clear in the White Paper, "The People's Lottery". The definition in new clause 3 is, apparently, that preferred by the Secretary of State for Culture, Media and Sport. The White Paper clearly stated that the Labour party was not abandoning the additionality principle. The Prime Minister is quoted as committing the Government to additionality when he said:
We don't believe it would be right to use Lottery money to pay for things which are the Government's responsibilities".
We entirely agree with that. If only the Government could act according to the spirit of the Prime Minister's comments.
New clause 2 is based specifically on the point made by the Prime Minister. It would insert in section 25 of the National Lottery etc. Act 1993, which deals with the application of money by distributing bodies, a new provision, subsection (5), which says: A body shall distribute any money paid to it under section 24 only in areas that are not the responsibility of government.
I trust that the Minister will recognise that wording, which echoes the words of the Secretary of State, and the integrity of what the Opposition are trying to do to ensure, in turn, the integrity of the national lottery.

Mr. Robert Maclennan: Will the hon. Gentleman clarify whether, in terms of the new clause, he believes that the arts should not be regarded as being within the responsibility of Government?

Mr. Spring: It is perfectly fair for the right hon. Gentleman to refer to the arts. Of course that is an area on which Government money has traditionally been spent. The difficulty with the Bill, as he will be aware, is that it deprives the arts of money and, because lottery money may be substituted for Government money, it thereby deprives the original good causes of an additional sum. That is the danger about which many people in the arts are legitimately concerned.
I hope that the Government will not dismiss new clause 2 by claiming that it uses an inadequate definition of additionality. New clause 3 is based on the definition that the Secretary of State says that he prefers. In Committee, the Government rejected an Opposition amendment that would have enshrined in the Bill the principle of

additionality and—I make this point very clearly to Government Members—that was identical to an amendment tabled by Labour Front-Bench Members during the passage of the 1993 Act. There we have it. The Minister for Arts dismissed the amendment, claiming that it was a reasonable effort, but an inadequate definition—it was Labour's own definition. That demonstrates that Labour's view of what is additional has been changed to accommodate its new proposal—to grasp money from the existing good causes to put towards its political agenda.
On Second Reading, the Secretary of State said:
I shall quote …a passage in the reply given to the Select Committee on National Heritage, as it then was, in July 1996 by the then Secretary of State for National Heritage, the right hon. Member for South-West Surrey (Mrs. Bottomley). She said very clearly—this is the precise definition of additionality:
`Lottery funds are not intended to substitute for funds which would otherwise have been provided by conventional public expenditure'.
We stand firmly by that principle; there is nothing in the Bill that undermines it."—[Official Report, 7 April 1998; Vol. 310, c. 162.]
New clause 3 would, therefore, insert in section 25 of the 1993 Act, which deals with the application of money by distributing bodies, a provision that:
A body shall not distribute any money paid to it under section 24 where it would substitute for funds that would otherwise have been provided by conventional public expenditure.
I trust that the Minister recognises that the wording of the new clause comes directly from that of the Secretary of State. If Government Members reject the new clause, we shall be in the ridiculous situation whereby they reject the Secretary of State's words. We are making it easy for the Secretary of State. How can he seek to reject his own words? I trust that he will have no objection to the inclusion of the new clause in the Bill.
The reason why the Opposition object so strongly to the new opportunities fund—this is why we tabled the new clause—is that it flagrantly breaches the additionality principle. The lottery was established to fund initiatives—it was done with cross-party support and true nobility of intent—that are additional to core Government spending programmes funded from taxation. As my right hon. Friend the Member for Huntingdon (Mr. Major) said on a number of occasions, these are areas that have traditionally been under-resourced by Governments of whatever political complexion.
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No one can seriously believe that the Government are committed to additionality in practice. The hon. Member for Hove (Mr. Caplin) certainly does not. In an outbreak of candour that must have had his pager humming for at least 48 hours, he said in an "On the Record" interview:
I think what we said in Opposition was clear, and it was right at the time that the lottery was introduced. But what we have now is a situation where the Budget spending level is set, and we have said that we are going to stick to that level for two years. I think it's right that a Government can say, 'We have a different view of how the lottery should operate.' That is a view that we've consulted on. We've received the consultations back and we're now developing a Bill to reflect these priorities, so I don't think there's anything wrong with that. I don't think they're compromising the lottery in any way".
All I say to the hon. Member for Hove is that if he does not recognise Alice in Wonderland, here it is in black and white. He no doubt now has a bright future behind him.
The new opportunities fund represents a significant departure from the original purpose of the national lottery, which was set up to fulfil a Conservative manifesto pledge to
restore our heritage and promote projects which will become a source of national pride".

Mr. David Prior: Does my hon. Friend agree that the only safeguard against diverting lottery funds into core Government spending areas is for the money to be distributed by bodies that are genuinely at arm's length from the Government, and that it is the breach of the arm's-length principle which compromises additionality more than any other factor?

Mr. Spring: My hon. Friend is exactly right because the centralising, control-freak tendency that is part and parcel of the way in which the Government seek to do business, and which is manifest in the Bill, is damaging to the future success of the lottery.
The Government claim that the Bill is a matter of fine-tuning the national lottery and that it only puts right problems that have arisen since the creation of the lottery. There are, indeed, elements of the Bill to which we have no objection. However, the Government's view that they are remaining true to the original principles on which the lottery was established certainly does not have foundation. The Secretary of State has affected to be mystified that the Opposition have not been lining up to support the Bill.
I simply challenge the Minister to explain how the homework clubs, child care and teacher training that he proposes to fund from the lottery accord with its original aims, which were set out in 1992, to
restore our heritage and promote projects which will become a source of national pride".
They do not—that is the simple truth. The original intention of the national lottery was to focus on areas of expenditure that were traditionally under-resourced by Government.
The initiatives that have been put forward under the umbrella of the Bill fall directly under the remit of the Secretaries of State for Education and Employment and for Social Security. Apparently, they were rejected by the Treasury and the Secretary of State's great friend and admirer, the Chancellor of the Exchequer, who was not prepared to spend taxpayers' money on them, so the raid on the lottery has taken place. Of the schemes that the Government propose to fund from the new opportunities fund, teacher training, education and public health programmes have traditionally—there is no escape from this—been funded by general taxation. The Government admitted that in a series of written answers.
The proposals are the thin end of the wedge. The legislation will give the Government power to divert money to any of their pet projects, providing an alternative to money from taxation. The Government's response to that accusation is that they have not breached the additionality principle, that the initiatives that they have announced are additional to core spending and that Governments have not previously funded such programmes. That is simply untrue.

Mr. Tim Collins: Does my hon. Friend agree that matters are getting worse? If the lead story in today's issue of The Times is to be

believed, the Chancellor has imposed an absolute cap on public spending for the remainder of the Parliament. That will mean that raids on the lottery will increase in frequency and in scale.

Mr. Spring: My hon. Friend makes exactly the right point. There has already been an increase in Government spending, with European Union rebates and a Treasury underspend. More and more will be taken from the lottery because all the early pledges on education and health are manifestly failing, and people clearly know that.
It is flagrantly incorrect to say that the Government are somehow separating spending on the proposed new programmes from what has gone before. That is sheer sophistry. Even if the initiatives were genuinely new, they would still fail the additionality test because they relate to areas for which Governments traditionally accept responsibility—health, education and the environment. In Committee, the Minister for Arts amply demonstrated the absurdity of the Government's case when he was challenged by my hon. Friend the Member for Eastbourne (Mr. Waterson) to provide an example of spending that would breach the Government's new definition of additionality.
My hon. Friend said:
I have repeatedly tried to think of a project that would breach additionality under the new, wholly elastic definition, but have not been able to do so. I hope that the Minister will be able to give one or two examples, and I would be happy to give way to any member of the Committee who can. The fact is that additionality will now mean whatever Ministers want it to mean.
Of course it was impossible to find an example; perhaps the Minister can work harder to try to find one today. Under the Government's new, narrower definition, no spending breaches the additionality principle, provided it is additional to existing spending. However, spending from the lottery is, by definition, additional.
The fraudulent nature of the Government's case was clearly demonstrated by the Minister's wholly inadequate responses to my hon. Friend the Member for Eastbourne. The Minister employed the traditional Front-Bench trick of trying not to answer questions. He said that there were no examples of breaches of additionality because the Government had not breached the principle. He said:
The hon. Member for Eastbourne was incapable of finding an example of expenditure that had replaced Government funding. That holds true throughout the history of the national lottery under the previous Government and during the past year under this Government.
When challenged to refute the suggestion that the Government had introduced the Bill specifically to breach the additionality principle, the Minister fell back on the Secretary of State's definition, which is, effectively, "If it is lottery money, it is by definition additional." He said:
It is vital to make a distinction between grant and aid, or core Government expenditure, and expenditure by the national lottery.
At the third attempt, the Minister at last came up with two examples that would not be eligible for money from the new opportunities fund because they would breach additionality. He said:
The hon. Member for Eastbourne asked whether it would support hospital beds or text books. He wanted an example of Government expenditure that would not be eligible for the fund and, inadvertently, gave two such examples. The fund will not fund hospital beds or text books."—[Official Report, Standing Committee A, 30 April 1998; c. 125–32.]
However, under the Government's definition, there is no reason on earth for the new opportunities fund not to fund text books and hospital beds in due course. We shall simply wait to see. We already know that it will fund the digitisation of material in public libraries and services that are already offered by general practitioners. It will simply be a short leap to text books and hospital beds, or whatever is politically expedient, to echo the words of my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) about the supposed rigour of the Chancellor's public spending limits.
The Government will pay for teacher training from the new opportunities fund although they have already admitted that they currently provide £296.8 million to train serving teachers under the grants for education support and training programme, approximately 5 per cent. of which is spent on information technology training. Money from the budget of the Department for Culture, Media and Sport is spent on training library staff despite the fact that the Government plan to use the lottery for such funding.
Tellingly, the Chancellor announced in his pre-Budget statement that the Government intended to set up child care schemes, the cost of which would be met by the Treasury and the new opportunities fund. He did not even seek to disguise that fact. He said:
Funds will be available to set up as many as 30,000 new out-of-school clubs, which will provide places for almost 1 million children. The total cost over five years is £300 million, which is now budgeted for in our plans and represents the biggest ever investment in child care. The cost will be shared between the Exchequer and the new opportunities fund …A national child care strategy is no longer the ambition of workless parents; it is now the policy of this country's Government". —[Official Report, 25 November 1997; Vol. 301, c. 777.]
There was no attempt to disguise the fact that, according to the Chancellor, Government policy is being paid for by the lottery. Despite the Secretary of State's claim that out-of-school-hours activities are not part of core statutory school provision, which course it is, of course, the Government's responsibility to fund, it is clear that the Government already provide money for out-of-school child care initiatives from the Department for Education and Employment budget. There we have it in black and white; it totally contradicts the spirit of what the national lottery was destined to be when it was set up, and it certainly contradicts the basis on which the lottery has been such a success.
Healthy living centres will compete either with NHS services, particularly those of GP fundholders and other primary health care providers, or with private sector health clubs, or both. Almost all the services that the healthy living centres will provide are already provided by GPs through the taxpayer-funded national health service. It is arguable that the whole basis of the NHS has moved further towards the provision of primary care. That was highlighted and emphasised in the White Paper, "Health of the Nation", and it is encouraging that, in the past few years, there has been such a focus on primary

care and preventive medicine. The White Paper makes it clear that healthy living centres are to be part of the Government's health care provision. The document states:
healthy living centres will play an important role in the Government's public health strategy".

Mr. Ivor Caplin: Hear, hear.

Mr. Spring: The hon. Gentleman says, "Hear, hear", but we are debating taxpayer-funded activities within the NHS being paid for by the lottery, at the expense of good causes. If, after sitting for weeks in Committee, he does not understand the importance of that, he understands nothing. The Government's published analysis of the responses to the White Paper makes it clear that many of the responding organisations, such as local government, health, education and voluntary service organisations, were concerned that the new opportunities fund would simply be used to replace rather than add to core Government spending.
The document states:
A section of respondents from the education sector argued strongly that some of the proposed areas of activity and interest in the New Opportunities Fund, (as well as NESTA), especially the training of teachers and librarians to use and teach information and communications technology, and out of school hours activities are core to the education mission. There were doubts and uncertainties amongst the same groups about whether the principle of additionality could be adhered to. Some education authorities and professional bodies as well as campaign groups were clear that this principle would not continue to be supported over time, and that this should be faced up to openly".
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The respondents to the White Paper who strongly supported the establishment of the new opportunities fund demonstrated, in doing so, how clearly the Government are breaching the additionality principle and how the lottery is destined to become, tragically, the engine of the Government. Many of those respondents were concerned that initiatives funded by the lottery should be co-ordinated with other aspects of Government policy. "Analysis of Responses to the Lottery White Paper Proposals" states:
There was a very positive welcome for developing Information and Communications Technology training programmes for teachers and librarians, consistently linked with the proviso that the programme should fit in with other DFEE initiatives. There was a particular concern that the apparent synergy between this White Paper and the Excellence in Schools White Paper should be captured. The Excellence in Schools White Paper proposes to increase levels of literacy, numeracy and information and communications technology skills. It was important that the Lottery initiative neither conflicted with nor repeated these initiatives".
Similarly:
For example, one local authority said that it hoped that the development of Healthy Living Centres would be firmly placed within the broader public health remit of the White Paper Our Healthier Nation".
In Committee, Labour Members not only made it clear that they supported the Government's decision to breach the additionality principle, but unashamedly admitted that they looked forward to taking credit for some of the Government's schemes. I can just imagine, as the next general election approaches, lottery-funded schemes being sold as being somehow a Government initiative, paid for by the taxpayer and of some great benefit, purely for party


political reasons. My hon. Friends and I had the clear impression that Labour Members were simply drooling at the prospect of this raid on the lottery providing things that they might find electorally attractive in their constituencies. As the expert in these matters, the Minister for Sport, will know, photo opportunities galore appear to be very much in their mind.

The Minister for Sport (Mr. Tony Banks): I feel a photo opportunity coming on now.

Mr. Spring: I fear that the Minister may be disappointed.
There is another, more practical test of additionality. I confidently look forward to seeing queues of anxious Labour Members lining up to try to take credit for initiatives that have been funded from the lottery via the new opportunities fund even if, in the words of the Prime Minister, they are not the responsibility of Government. I hope only that they will have the decency—although I doubt it—to own up to the fact that these things will have come about at a certain cost, and that that will be faced by the good causes and the arts, heritage, charity and sports projects that should have received the money that has been diverted into the new opportunities fund to suit the Government's political agenda.
We all know what is going on here. Peter Riddell was correct when he wrote in The Times on 6 April of the proposal to create the new opportunities fund:
a Treasury raid it still is, to evade tight limits on public spending and to find new sources of revenue without having to raise taxes.
There we have it. The Government have not lost the itch to spend. They happen just to be spending money from the national lottery at the expense of the arts, sport, the heritage and the caring charities. It gives new meaning to the seven-year itch.
Amendments Nos. 7, 2, 3 and 4 seek to re-establish the arm's-length principle in the distribution of lottery money, which, again, is under threat from the Bill. It is not only my hon. Friends and I who are concerned about that. For example, the Sports Council said in a letter:
We believe that the arms length principle between government and the Lottery distributing bodies should be maintained, and that the new power given to the Secretary of State to instruct us to `comply' with directions to delegate to specific organisations is too prescriptive.
We are also concerned that the powers on the Secretary of State to issue directions to us in relation to our distributing strategies should not be too prescriptive. Delegate bodies must demonstrate that they can effectively account for expenditure of lottery funds.
Here again we come to what is at the heart of our objections to the Bill. The Government claim, as they have on additionality, that they are adhering to the arm's-length principle, but, if that is true, why are they introducing in the Bill many powers that will enable them clearly to breach that principle by controlling how lottery money is spent?
Obviously, I accept that the Secretary of State has the existing power under the National Lottery etc. Act 1993 to give directions to the distributing bodies. That is not in dispute, but the Government recently published new directions that will, in effect, reduce the lottery's efficiency and its overall impact by allowing the distribution bodies to dispense with the requirements for matching funds to enable them to carry out the Government's political objectives.
That unwelcome development will, yet again, reduce the lottery's effectiveness and ultimately the public's faith in the national lottery, which stands at a high level at present. It will reduce the overall purchasing power of lottery funds; it represents a drift from encouraging initiative to fostering dependence. As ever, the Labour party is filled with rhetoric, but entirely misses the critical point that so endangers the success of the national lottery. The powers proposed for the Secretary of State in the Bill represent a wholly new departure from arrangements for the good causes in the 1993 Act. We object in principle to the idea of the lottery being used to fund areas that are the absolute responsibility of Government, but we also strongly object to the introduction of the order-making power in the Bill, which effectively gives the Secretary of State control of the new opportunities fund.
We have a flavour of what is to come in the draft directions for the new opportunities fund. We see, for example, that the Secretary of State has already given a direction that healthy living centres should cover 20 per cent. of the country. One can argue, "Why not 15 or 25 per cent?" It is an arbitrary decision, made on a political basis. The new opportunities fund has, in a sense, had its instructions made in advance.
If the Government planned to respect the arm's-length principle, they would have set up the new opportunities fund in the same way as the other good causes were set up. There is no need to have done it in this way. They would not have proposed an order-making power for the Secretary of State to specify on an ad hoc basis how the money in the fund should be spent. To enable them to get their hands on the proceeds of the lottery to supplement general public expenditure, the Government have dramatically increased the Secretary of State's control over the lottery.
That order-making power does not exist in respect of any of the other good causes and was simply not envisaged when the lottery was first conceived, when both sides rigorously defended the arm's-length principle. It is a great tribute to those who introduced the Bill in 1993 that that principle being enshrined in legislation was approved by all hon. Members. It was achieved with true nobility of purpose. Why, therefore, is it being changed? The Government are incapable of providing a satisfactory answer.
The Bill contains deliberately vague definitions of health, education and the environment. It enables the Secretary of State to make ad hoc decisions. Can the Government offer any other explanation or justification for including this order-making power, which is a great departure from previous legislation, other than that it will enable the Secretary of State flagrantly to use the lottery to pursue the Government's political agenda?
It is extremely unfortunate for the long-term health and success of the lottery that the new opportunities fund will, unlike the other good causes, be under direct ministerial control. That is directly in conflict with the arm's-length principle supported by both parties when the original Bill was enacted, and it was much prized by the lottery industry.
The Secretary of State and his successors will be able to specify new causes that will benefit from lottery money without further reference to Parliament. There is no point


the Minister telling us that new initiatives will have to be approved by affirmative resolution. In Committee, he said:
I want to make one further point clear, which I hope the hon. Gentleman will consider before, I hope, deciding to withdraw his amendment. He raises the spectre of the Secretary of State extending matters further: any further initiatives, over and above those in which the New Opportunities Fund will get involved, will—as he will appreciate from his close reading of the Bill—require affirmative resolution of the House. So, the powers remain with the House, rather than the Secretary of State."—[Official Report, Standing Committee A, 28 April 1998; c. 70.]
How can the Minister sit there with a straight face believing that that in any way justifies the centralisation of power to the Secretary of State? That is utterly absurd. It was not the crowning parliamentary explanation of the Minister's life. He knows perfectly well that affirmative resolution is not the same as primary legislation: it will not require any measure of public support.
Was the Minister really suggesting that an order-making power receives anything like the same scrutiny as a Bill during its passage? Of course it does not. Is he suggesting that the Secretary of State would have difficulty getting such measures approved by Parliament? The Government will not even have a proper debate on their proposals. Parliamentary scrutiny of something as important to the life of the nation as the lottery is crucial for its continued acceptance by the public and for its continued success, but the Government reject such a provision.
By contrast, as the Minister knows full well, the 1993 Act required primary legislation to divert money from the original five good causes. This Bill gives the Secretary of State a mechanism to pay for any new scheme he chooses to fund. In Committee in the other place, the Minister admitted that the new opportunities fund was fundamentally different from the other distributing bodies in the way in which it was being set up and would operate. Lord McIntosh of Haringey said:
Of course, the relationship between the Secretary of State and the new opportunities fund, as proposed in the Bill, is different from that which exists between the Secretary of State and the other lottery distributors. There is no pretence otherwise.
We are grateful for the candour of one Minister at least.
Lord McIntosh went further when he made it clear that the activities of the new opportunities fund had deliberately not been clearly defined. The Bill has been drafted to give the Government maximum room for manoeuvre. Lord McIntosh said:
The relationship is different because the new good cause is different. The existing good causes are pretty well defined and the distributors are in the main well established as expert bodies within their fields. In the case of sport and the arts, the distributors are the key sectoral bodies; the Heritage Lottery Fund was not the biggest player but was well placed to understand the whole sector, and the National Lottery Charities board has quickly established itself as a respected and knowledgeable body in the charitable field.
He added:
By contrast, the new good cause ranges over a vast area. It encompasses health, education and the environment, each of which in itself is broader than any of the other good causes."—[Official Report, House of Lords, Grand Committee, 22 January 1998; Vol. 584, c. 71–72.]

Mr. Prior: May I draw to my hon. Friend's attention the definitions in clause 6, which states:
'education' includes training and the provision of activities for children;
`the environment' includes the living and social environment
Those definitions could hardly be wider.

Mr. Spring: My hon. Friend is absolutely right; that is the danger of the Bill. It includes an order-making power and centralisation measures, but it lacks provisions for parliamentary scrutiny. It could result in an increase in activities under the umbrella of the new fund without proper scrutiny, to the great cost of the original good causes, which need most support and financial backing.

Mr. Christopher Fraser: I concur with the point made by my hon. Friend the Member for North Norfolk (Mr. Prior). Does my hon. Friend agree that "environment" in this context also means the political environment? The Government may seek later to develop the political environment, and that is increasingly worrying.

Mr. Spring: My hon. Friend is absolutely right. At the airport the other day, I saw an advertisement for a cosmetic called "Control Freak"—this may be of interest to the Minister for Sport; I mean that in the nicest possible way. The advertisement talked about taking the oil out of the system and replacing it with something better. It reminded me of the way in which the Bill is being orchestrated by the Secretary of State of a Government who are the most incredible bunch of control freaks in the history of government in this country.
The Minister in the other place admitted that the order-making powers in the Bill were different from what had gone on before. We are not in agreement with the establishment of the new opportunities fund, as the Minister for Arts implied in Committee, although none of us understood what he was on about. The Minister seemed unable to grasp the fact that we were fundamentally opposed in principle to the establishment of the new opportunities fund. As some Labour Members pointed out, although it may be desirable to spend money in some of these areas, it should not be pinched and raided from the national lottery.
We want to make it absolutely clear by our amendments that we are opposed to the establishment of the new opportunities fund, and to the way in which the principle of additionality and the arm's-length principle are being flouted. We believe that the removal of those two key elements will gravely damage the long-term success and viability of the national lottery.

Mr. Fraser: Before I speak—

The Minister for Arts (Mr. Mark Fisher): Before you speak?

Mr. Fraser: Before I come to the main thrust of my speech, I should like to allude to some of the work that Labour Members did or, rather, did not do in Committee. The hon. Member for High Peak (Mr. Levitt) came top of the list, with nine interventions and two speeches. I should


like to continue down the list as an illustration of how the Bill should have been more fully debated by Labour Members—

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. This is all very interesting, but the hon. Gentleman must deal with the terms of the amendments.

Mr. Fraser: I will indeed, Mr. Deputy Speaker. It is, however, sad to note how the Government ignored what we had to say about additionality. The Hansard reports of the Committee would make interesting reading in that respect.
The purpose and heart of the Bill are to allow the Government to get their hands on money from the lottery. The Government have tried to dress up the legislation in nonsensical talk about the evolution of the lottery and the need to restore public confidence in it. However, the Government's approach to the Bill in Committee was a sure-fire way of destroying that public confidence. The fact is that, after so many years of whining in opposition, the Labour party now, in government, has to make decisions, circumscribed by the difficulty of being bound by the previous Government's spending limits.
In Committee, Labour implied—although not in so many words—that power has come its way, and it will be used to raid the lottery for health, education and the environment. The Government argue that they must look to the lottery for funding. Of course they must: the Chancellor has presented his case to the country over the past year, and that has left the Government with no alternatives. That means ditching the additionality principle straight away. Labour Members failed to recognise that in Committee; they also failed to speak up in defence of what the Government are doing.
Governments can always make up new definitions of good causes, thereby moving the additionality goalposts. That is precisely what the Government are doing. They have introduced a range of devices allowing the Secretary of State to control how lottery money is spent. The fact that Labour Members seem to believe that that is fine is extremely worrying, given that the Bill will have profound effects well beyond those that the lottery was set up to achieve.
The arm's-length principle has been ditched, too—and the Government appear equally unconcerned about that. The silence from the Government Back Benches has been deafening, and it has been left to the Opposition to table amendments designed to preserve the original intentions behind the lottery. No one in the Labour party seems to care about the fact that, when in opposition, Labour stood four square behind the principles of additionality and arm's length and sought to enshrine them in the original Bill. Now we are told, "That was then." Labour's former principles appear to count for nothing, and it would seem that the Government have changed their priorities. Their view is: if the lottery has to be used to fund these new priorities, so be it.
Put simply, the Government intend to use the national lottery to subsidise public spending without raising taxes. The Treasury is seeking an additional £1 billion by the back door, and the Bill paves the way for that.
By setting up a new lottery distributing body under the direct control of the Secretary of State, the Government

are giving themselves the chance to do as they please with the money. Writing in The Times, Peter Riddell made the point very clearly:
The new fund also violates the basic principle, reaffirmed by Tony Blair last summer, that it would 'not be right to use the lottery to pay for things which are the Government's responsibilities'".
The Government are breaking the additionality principle that was so vehemently supported when the lottery was set up in 1993; and they are doing so to finance mainstream health, education and environment programmes. "Environment" is a generic word, covering a multitude of projects that we cannot anticipate at present. It is open to this or a future Government to misuse the term, which is why I would argue against its inclusion in the Bill.
The idea of an information-rich and an information-poor society has been debated at some length elsewhere, and the Government have stated that they want everyone to join in the information-rich society. In Committee, I told the Minister that schools should therefore offer all pupils an equal chance to participate in that society—hence the teaching of technology must be part of core Government spending. I was not wholly convinced by the response that I was given by the Minister. Public spending programmes continually evolve. Some hon. Members, including me, made the point on Second Reading that the Government cannot justify transferring to the national lottery the costs of such evolution. I should like to know how any of the planned projects fall within the remit of the Department for Culture, Media and Sport—on current evidence, they do not. They all fall into areas for which Governments have traditionally accepted responsibility. The projects in question have been mooted by the Secretaries of State for Education and Employment and for Social Security; but they were rejected by the Treasury, so now they have to be paid for by the lottery.
As has been said, the Bill brings in an order-making power allowing the Secretary of State to determine how lottery money is spent, thereby at a stroke overturning the arm's-length principle. It is the Secretary of State who will specify initiatives. Other distributing bodies set up by the National Lottery etc. Act 1993 are truly independent of Government, and all involved in that arrangement have witnessed the benefits of such independence. Now the Secretary of State will exercise enormous control over the new opportunities fund. That runs against the whole spirit of the establishment of the lottery, which thus far has been a remarkable success.
Evolving Government spending programmes should not be paid for by plundering the lottery. Because of the initiatives that the new opportunities fund will carry, the Secretary of State will become a distributing body. I concur with the view of my hon. Friend the Member for West Suffolk (Mr. Spring), that the whole idea is Treasury-led and means abandoning the hands-off principle. The independence of the good causes will be put in jeopardy. Had the Government wanted to respect the arm's-length principle, they would have set up the new fund along the lines of the other distributing bodies: they chose not to do so. Furthermore, they would not have proposed for the Secretary of State a power to specify, on an ad hoc basis, how the money in the fund is to be spent. The fact that the Secretary of State can involve himself fully justifies the concern expressed by my hon. Friends that he will decide on the scope and direction of his involvement on a whim or fancy.
The Minister may recall that I put it to him in Committee that the arm's-length principle and the additionality principle go together. If the Secretary of State did not have the power vested in him, he would not be able to breach those principles. The power vested in him means that anything he spends has to count as Government spending because he is part of the Government. He has given himself the mandate that he needs.
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The truth is that the Labour party is changing the purpose of the national lottery. I am sure that the Secretary of State and the Minister for Arts will agree that the Secretary of State is intervening in the way in which lottery money is distributed, as the Labour party manifesto promised he would. Labour stated:
There has been no overall strategy for the allocation of monies and no co-ordination among the five distributor bodies about the projects deserving to benefit from the National Lottery.
That quotation comes from a document entitled "New Labour: Because Britain Deserves Better", published in April 1997.
Policy directions by the Secretary of State will be introduced with the passage of the Bill. On Second Reading, the Secretary of State referred in detail to some directions when he said without any intended irony that they were important to ensure that
lottery money is going where it counts."—[Official Report, 7 April 1998; Vol. 310, c. 170.]
I wondered at the time whether that was not a Freudian slip and whether the Secretary of State had unconsciously decided to reveal that the money would be spent where Labour votes counted. That has been my suspicion since that comment was made.
The Government want to establish a new direction for the lottery, one that fits with the broader sweep of Government policy and which will serve as a means for redistributing wealth by funding a range of social programmes. To make matters worse, the activities of the new opportunities fund have not been clearly defined. Why have the Government drawn up such vague definitions of health, education and the environment? As I said, "environment" is a generic term, and I should be interested to hear the Minister explain his precise understanding of the environment—social, economic or political—in this context.
We have had few clues from the Government, so we cannot be clear what their intentions are. The Government will not even have a debate in the House on what they propose. The 1993 Act would have required primary legislation to divert money from the original five good causes, yet these proposals come from a party that professes to support open government. I support the new clause.

Laura Moffatt: I am a little confused about why the hon. Member for Mid-Dorset and North Poole (Mr. Fraser) should be amazed that in Committee Labour Members found it difficult to take an active part, when all that we have heard today from Conservative Members is

a rehearsal of what we heard then. Given the uninspired new clause, I am beginning to wonder whether there is truly any real opposition to the Bill.
It was very difficult to sit and listen to the arguments about additionality and the wonderful contribution to the debate made by Mr. Riddell in the newspaper. I am sure that he is a terribly interesting writer, but I listen much more to the people I meet in the street who are in favour of the proposals.

Mr. Spring: I am interested to hear the hon. Lady use the word "contribution". Will she confirm that she made no speech in Committee and that her sole contribution was a single intervention?

Laura Moffatt: I am glad to say that that intervention left the hon. Gentleman speechless for few moments, which pleased me immensely.
I hope that we shall shortly finish this debate and see the Bill in place, so that it can reach the people who are interested in what the new opportunities fund will bring. It is sometimes galling to have to listen to the same trite old nonsense, when people want lottery money to be spent as the Government propose.
I was recently lucky enough to attend a session organised by my local health authority to deal with healthy living centres. They are the reason why I was inspired to contribute to debates on the Bill. I am a nurse of 25 years' standing, and the proposals seemed to me to be a new way to bring good health to our communities and to inspire people to take their health into their own hands.

Mr. Prior: Will the hon. Lady explain what is wrong with raising taxes to fund health?

Laura Moffatt: This is a new way, a way to involve communities. We get caught up in the nonsense about additionality, but people on the street are asking when they can contribute and how they can work with their general practitioners. It has been said that the proposals would do terrible damage to private health clubs, but if private health clubs had any sense, they would be entering into partnerships with the local groups that are setting up the healthy living centres. The Opposition have completely missed the boat.

Mr. Fraser: The hon. Lady is ranging rather wide, so perhaps I can ask her to clarify whether she agrees that the money going to healthy living centres will undermine the good work currently being done by GP fund holding practices.

Laura Moffatt: I do not believe for one moment that it will undermine the work being done by GP fundholders. In fact, I shall carry on talking about the meeting that I attended with many GPs in West Sussex. They were very keen to take part in the programme and were asking whether it would be only for inner cities or whether rural areas could contribute. They wanted to know how they could show that they knew people who suffered poor health and whom they could help to adopt a healthy way of living, so I do not think for one moment that GPs will be threatened. In fact, they will welcome the proposals with open arms, as will others in our communities and our children.
The new opportunities fund involves new initiatives, things that have not been done before and on which we shall be able to expand. Indeed, 20 per cent. of our communities will be able to take part. That is very exciting. I understand that the areas where the health action zones are located will naturally have priority, but I shall be very excited when the first centre is set up.
I listened to the hon. Member for West Suffolk (Mr. Spring), who is currently involved in a conversation, saying that we must have a sense of national pride in our arts and treasures. Of course we must, but, as a nurse of many years' standing, my national pride means making sure that we have a healthy nation that can be proactive in achieving good health and which can live longer. I shall be very proud when the first healthy living centre is set up.

Mr. Collins: The hon. Member for Crawley (Laura Moffatt) made an interesting speech. Although I agreed with her on one point, I shall start with another, with which I disagreed. The hon. Lady said that as people want the proposals in the Bill, we should jolly well get on with them. No doubt some people want them, but it is equally clear that others do not. It is the duty of the House properly to debate matters on which there is division in the country and not simply to sweep aside debate on the ground that because the Government want something, they should have it without debate or discussion.
I agree with the hon. Lady about the importance of health, education and the environment. If I had a limited sum of money, I would always prefer to spend it on schools or hospitals rather than on skating rinks or opera houses. For precisely that reason, some of those facilities are clearly intended to be funded by the taxpayer, under a system whereby one can go to prison for failing to contribute to the national health service or state education. Other things that are less important but still valuable are funded in another way. That is why the lottery was set up. As long as those good causes were reliant on taxpayer funding, politicians of any party would always sideline, exclude and reduce them. The lottery was set up on a principle of additionality, which not only had bipartisan support at the time, but arguably enjoyed stronger support from Labour than from the Conservatives.
I pay tribute to the role played by my right hon. Friend the Member for Huntingdon (Mr. Major) as Prime Minister in bringing about a national lottery. Had it not been for his drive in overcoming the bureaucratic and political obstacles to the creation of a national lottery, we would have nothing to discuss today.
The principle of additionality is extremely important and so is new clause 2, in the names of my right hon. and hon. Friends. The principle of additionality that it sets out is defined in exactly the language employed by the Prime Minister, not in an off-the-cuff speech in a Sedgefield pub, but in his foreword to the White Paper "The People's Lottery", on which the Bill is based. Therefore, it falls to the Government and the Labour party to explain precisely why they are not happy with the wording in new clause 2, which seeks carefully to include in the Bill the words used by the Prime Minister in a declaration of Government policy after the general election and in an official White Paper.
Some Opposition Members believe that the Government are not happy about the principle of additionality being written so clearly on the face of the

Bill, precisely because the story in The Times this morning is right. The Chancellor of the Exchequer, in his own campaign—which has rather less to do with the progress of the British economy and rather more to do with his ambition to become the next leader of the Labour party—is seeking to prove his own toughness by establishing tough public spending limits for as far ahead as we can foresee. That means that the Government can fulfil their early election pledges—such as those on class sizes and hospital waiting lists, which they have failed to fulfil in their first 13 months in office, that they have little prospect of meeting in the next 13 months in office and which they may or may not meet in the lifetime of this Parliament—only by raiding national lottery moneys to fund education and health spending, which, in the normal course of events, should be funded by the taxpayer. That is one agenda pursued by the Bill, and it would be limited by new clause 2.
There is another agenda, however, which is addressed by amendment No. 4, in the name of my right hon. and hon. Friends. Clause 7, as drafted, would allow the Secretary of State to set out initiatives that would apply throughout the United Kingdom or in one or more areas.
The Minister for Sport is listening carefully to one of his hon. Friends, but I believe that he has a direct and personal interest in the possible use of the new opportunities fund in one particular part of the United Kingdom. He represents a London constituency, and London is doing extremely well out of the national lottery. As we all know, the Minister for Sport may have another rather more personal political agenda relating to a certain political post in London. If the new opportunities fund could be used to benefit London, perhaps to the disbenefit of other parts of the United Kingdom, but to the great joy and happiness of the citizenry of the metropolis, the Minister for Sport might feel that the citizenry of London would reward him for his part in that, by electing him to the post of lord mayor.
The Minister knows that he has tough opposition. Lord Archer has made it clear that were he to be elected lord mayor of London, he would never write another book, and that makes it a tough electoral platform for the Minister for Sport. He will find it extremely difficult to come up with a platform policy to beat that.

Mr. Deputy Speaker: Order. We really cannot have a diversion about what may happen in the future election of the mayor of London.

Mr. Collins: I apologise for that, but it relates to why the new opportunities fund and the provisions that amendment No. 4 would strike out—enabling the new opportunities fund to benefit one particular area of the United Kingdom—are so important. There should not be even a suspicion of doubt that the Government or any Minister within it might seek to use lottery funds to benefit a particular geographical area within the United Kingdom. If I cannot refer to London, for reasons that you rightly pointed out, Mr. Deputy Speaker, perhaps I may touch on the prospect of the provisions that would be struck out by amendment No. 4 being used to benefit areas that happen to be represented by members of the governing party.
It is worrying that the Bill grants such enormous discretion to the Secretary of State to direct moneys to enormously popular projects relating to education and


health, wherever and for whatever reason he or she deems fit. My hon. Friends who served on the Committee tell me that, throughout the discussions on the Bill, Labour Members were enormously excited by the prospect of lottery money being spent on projects in their constituencies, having been directed there by the Government.

Mr. Fraser: I am sure that my hon. Friend will agree that in Committee the high aspirations of Labour Members resulted from the knowledge that the Government could deliver on those aspirations.

Mr. Collins: My hon. Friend makes his point extremely clearly. If amendment No. 4 were not accepted, we would risk the Government being able to use lottery funds in the pursuit of pure party political advantage.

Mr. Banks: I am grateful to the hon. Gentleman for giving way. First, may I remind the hon. Member for Mid-Dorset and North Poole (Mr. Fraser) that he should not get up to make a point while clutching a brown envelope?
I remind the hon. Member for Westmorland and Lonsdale (Mr. Collins) that I receive letters from hon. Members of all parties asking, "Why hasn't scheme X in my constituency received more money?" It is perfectly valid for hon. Members to lobby on behalf of organisations. Hon. Members of all parties have been present when large cheques have been handed over from the lottery or the Millennium Commission in the presence of the press. No one ever claims that the hon. Member managed to get the funding or that the Government provided it. It is a form of publicity in which all hon. Members have indulged.

Mr. Collins: I bow to the Minister's expertise on public relations initiatives and stunts, but his analogies relate to the Millennium Commission, which is an arm's-length body. There is no question of any Secretary of State being in a position to instruct the Millennium Commission as to how it spends its money. Amendment No. 4 would strike out the provision that
the New Opportunities Fund shall comply with any directions given to them by the Secretary of State.
That is what causes concern, not just among Opposition Members, but among bodies that supported the principle of arm's-length responsibility in respect of the distribution of lottery funds and which are extremely worried by the way in which the legislation is moving towards hands-on control by Secretaries of State who currently serve under a Labour Government. In future, they may be of a different political party, but, in any event, they should not be directly involved in such decisions. That is why our new clauses and amendments would return the national lottery to the principles that led to its creation, its great success and its widespread public support.

Mr. Damian Green: I support the new clauses and amendments, which would save the Government from themselves. The Government believe that their policies will give them short-term popularity, but they will lead to long-term opprobrium when people realise the damage that is done to the national lottery,

which has for several years supported many good causes which are valued throughout the country. Once the lottery is damaged and has lost the trust of the people, it will have great difficulty regaining that trust and will no longer be able to provide as much support for good causes as it has during its first four years.
The Government's warm words disguise their ill-intentions. The new clauses and amendments would restore the two principles that the Bill badly breaches: additionality and the arm's-length principle. All fair-minded people—certainly all those who have followed every kick of the ball in this match—agree that additionality has always been difficult to define, but the Government are clearly trying to sweep the principle away. Under the Bill, any spending could legitimately be funded by the lottery, and the current division between spending on what is essential, which should be funded from taxation, and spending on what is desirable, which the lottery has always funded, could not be maintained, unless the Government accept the new clauses and amendments—which I do not expect them to do.
There is nothing that would not be covered by the principles set out by the Government. The lottery could fund anything under the new system. Conventional public spending has always covered a wide range of activities. The level of public spending that society regards it as sensible to fund has gone up and down over the decades, but there has always been a clear core of services that are best provided from collective endeavour through taxation. That covers spending on defence, the police and, under the welfare system that we have had for most of this century, health and education.
Items of expenditure that would be funded by the new opportunities fund, such as information technology training for teachers and the healthy living centres on which the hon. Member for Crawley (Laura Moffatt) is so keen, would normally fall within those broad boundaries of conventional public spending without anyone blinking. If the Government announced that they proposed to spend public money on extra IT training for teachers, nobody would consider it remotely remarkable; it would be a reasonable use of conventional public spending. However, saying that this year's priority was a new set of opera houses or sports stadiums would be bizarre, particularly for a Government who claim to want to put pressure on public spending.
Although the theoretical boundary for what should fall under the additionality principle may be difficult to define, in practice the distinction between the essential and the desirable is clear. If the Bill is not amended, it will drive a coach and horses through that division and allow almost any expenditure to be funded by the lottery. We all know that the Government are doing that so that they can spend more money without appearing to raise taxes.
The people will see through that attempted dishonesty. The White Paper was predictably and drearily called "The People's Lottery". The Government seem to forget that the people are not dim and notice political dishonesty. We are witnessing such political dishonesty. The people will see that items that they expect to be funded from taxation are to be funded by the lottery. They will regard the Government as dishonest and cease to trust them. [Laughter.] Labour Members may laugh, but I look forward to seeing them in two or three years when their popularity has fallen. I am not greatly concerned about


the Government's popularity. I shall not lose sleep when they sink into unpopularity. However, I shall lose sleep over the fact that they will drag down with them the reputation of the national lottery, which is doing a lot of good for this country. When the lottery is seen to be a plaything for politicians who want to spend money while pretending not to raise taxes, people will be turned off and will stop playing the lottery, resulting in less money being available for good causes. Labour Members should regret that.
The most ridiculous defence that we heard in Committee was that anything that had not been funded before could legitimately be funded from the lottery. That argument supposes that the world stands still and technology never changes, particularly in health and education. Twenty years ago, IT training for teachers would have been meaningless because IT had not been developed. It is now essential for education, and should be funded from education spending. The Government have decided to fund it from money that should not be used for essential spending.
Additionality is not the only principle to be badly breached. The Government profess to support the arm's-length principle, but their actions belie their words. I am delighted that the right hon. Member for Caithness, Sutherland and Easter Ross (Mr. Maclennan) has returned to his seat, because I am about to say something nice about a Liberal Democrat—admittedly a long-dead one, who once famously said that in the long run we are all dead. Lord Keynes was a Liberal who invented the arm's-length principle when he set up the Arts Council. The Government are doing their best to destroy that principle.
The new opportunities fund destroys the arm's-length principle in many ways. We have already heard about the problems with geographical distribution. I assure my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) that Labour Back Benchers eager to persuade Ministers to divert money their way for political reasons were heard not just in Committee: every Labour contribution on Second Reading was designed to elicit extra money. As the Minister for Sport has said, that is entirely legitimate, and we all do it. However, it is not legitimate to give the power of distribution directly to Ministers, because that will result in their indulging in straightforward pork-barrel politics. That will damage public confidence in the lottery and reduce people's willingness to play it, cutting the money available to good causes.
We have heard about healthy living centres. Again, short-term popularity will contrast with long-term political opprobrium for the Government, because they will be available only in the 20 per cent. of the country regarded as most deprived. The general practitioners in West Sussex who are desperately hoping for such centres will not get any. They will be hugely disappointed and the hon. Member for Crawley will have a lot of explaining to do to her GPs in the coming years. With their budgets permanently under pressure, health authorities will decide not to spend money on such centres because they will know that lottery money is going to them. The existing health service budget will be diverted away from such desirable spending.
The new opportunities fund will also have an incredibly elastic definition of the environment. It can mean absolutely anything. The Department of the Environment

has grown beyond all recognition in the past 10 years. Over the next 10 years, the definition of the environment in the Bill will also grow greatly and will be seen as another piece of straightforward pork-barrel politics.
My overall reason for supporting the new clauses and amendments is that, without them, the sum of the mass of detail in the Bill will bring the lottery into severe disrepute and greatly concern hon. Members on both sides of the House. In its four or five years, the national lottery has done enormous good for the country. The Bill that damages it will harm the country enormously. Without the amendments and new clauses, that is what the Bill will do.

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Mr. Andrew Tyrie: I well remember discussion about a national lottery first arising when I was in the Treasury in the late 1980s. We thought about whether we should make a serious proposal and worked quite hard on it. As everyone knows, in the end, Mrs. Thatcher ditched the idea. The crucial problem with which we grappled was exactly the subject of this debate—additionality. The problem was how to get money to causes that could be seen to be quite distinct from core Government responsibilities that were funded from general taxation.
Whatever we hear from Ministers tonight, I am absolutely confident that everyone in the country understands the fundamental distinction between spending on, for example, capital infrastructure for the arts, sports and heritage, and core funding in, for example, education and health. People will grasp over a run of years that the creation of the sixth good cause has blurred that distinction. They will realise that, in a world in which some things are clearly black and others clearly white, this area is grey, and that that greyness is enabling the Government to use lottery funding slowly but steadily to substitute spending from general taxation.
The national lottery has been a great success, partly because the Conservatives succeeded in finding a way of creating a lottery in which there was such a clear distinction. People want to participate in something that is not just a ramp for the Government to get hold of extra tax revenue but has a sense of excitement that is derived partly from knowledge of where the money will go. That will be eroded by the Government's proposals, but it will be put right if the amendments and new clauses are accepted.
The Prime Minister has made it perfectly clear that he agrees with the principle of additionality. I shall not bother to quote his words, because they have been cited on many occasions. It is clear that one of Labour's manifesto pledges will be partly funded by the sixth good cause, even though anyone who read the manifesto when it was published would have understood that the pledge would be funded from general taxation. There has clearly been a breach of principle, and people will gradually grasp that.
The sixth good cause represents not only additionality but—to coin an even worse term—subtractionality. It will subtract money from the other five causes. It is no good people saying that the five causes will continue to receive exactly the same funding. It is absolutely clear that they will receive less money than they otherwise would have done.
The creation of the shadow account almost certainly breaches the law. When I asked the Minister for Arts about that in February, he said that the statutory authority for


setting up the shadow account was the National Lottery Bill. If that is not a clear case of retrospection, I do not know what is. It must be a retrospective action to pass a law to justify an act that has already been executed. If the Minister wants to explain why that is not retrospection, I shall gladly give way. I see that he does not.
The Government have browbeaten the five good causes into accepting the proposal. They know that such retrospective action is challengeable in the courts, but they will not embark on a legal challenge because they need a relationship with the Government. The Government have escaped what should be, and easily could have been, an extremely embarrassing event.
The Minister for Arts is looking at the clock as I speak, so I shall conclude by asking him a few questions. What will he do when lottery fatigue sets in? Will he allow receipts that go to the sixth good cause to fall to protect existing funding of the five good causes? What will happen when people become accustomed to the flow of funds to core activities in education and health but lottery fatigue sets in and resources fall?

Mr. Banks: rose—

Mr. Tyrie: If the Secretary of State wants to say something, he is welcome to do so.

Mr. Banks: I am not the Secretary of State; I am a humble sports Minister. Does the hon. Gentleman play the national lottery?

Mr. Tyrie: Yes, I have played the national lottery. In fact, not long ago, I won about £80, so I am feeling particularly happy about the lottery. Perhaps the Minister will tell me how he is doing. Perhaps I am collecting some of his losses.
If it becomes clear that the funds for the sixth cause to which bodies initially became accustomed are no longer available, will the Minister for Arts be prepared eventually to use general taxation to plug the gap, or will he allow funding for the sixth good cause to fall? I support the amendments and would very much like to hear answers to my questions.

Mr. Prior: My hon. Friend the Member for Chichester (Mr. Tyrie) spoke of lottery fatigue. Looking at the face of the Minister of Sport, I know exactly what he means: there is a distinct sign of fatigue on the Labour Benches.
We must remember that the lottery has been a huge success and has raised a huge amount of money for the good causes because of the two key principles that underlie it: the good causes identified are in addition to normal public spending and the funds are distributed at arm's length from the Government.
The new opportunities fund will have an extremely broad remit. From the preliminary guidance provided by the Department, it seems that the fund will also be highly prescriptive. We are told:
The Fund shall, by September 2002, commit funds to projects that, between them, should establish or develop healthy living centres accessible to around 20 per cent. of the population".

We are told:
The Fund shall commit funds to out of school hours education projects which taken together should provide regular activities involving at least half of all secondary schools".
Proposed section 43C of the National Lottery etc. Act 1993 makes it clear that the new opportunities fund shall comply with the Secretary of State's wishes.
Let us compare that with a brochure that came through the post this morning from the National Lottery Charities Board, which has just distributed £133 million to 1,306 organisations to help the homeless, animal projects, village and community centres and projects to develop the voluntary sector. Most of us know that additionality is a difficult concept to define, but we all know when it is breached. If you cast your eye down the list of projects in your constituencies, you will know exactly what is—

Mr. Deputy Speaker: Order. I am sorry to interrupt the hon. Gentleman, but I remind him that he is addressing the Chair and must use the third person.

Mr. Prior: I apologise. It is clear to most of us when the concept of additionality is being broken.
I wish to refer to a point made by the hon. Member for Crawley (Laura Moffatt). I agree with what she said about healthy living centres, and we are not opposed to them. However, we believe that they should be funded through normal, general taxation.
The problem with the Bill is that clause 13 erodes the arm's-length principle for all the other good causes, and makes it clear that all other distributing bodies must produce a strategic plan that must comply with the wishes of the Secretary of State. That extension of Government control is over not only the new opportunities fund, but all other funds. That goes to the heart of our objections to the Bill. It is no longer a people's lottery, any more than the former Governments of eastern European countries were people's Governments. It is now a Government lottery. It is in danger of losing the support of the people, and the ultimate losers will be the good causes.

Mr. Peter Brooke: First, I declare an interest. Within the past month, I have won two £10 prizes, which have encouraged me to continue; it was some time prior to last month that I last won. Secondly, as the Minister for Sport has been accusing the whole House of writing him begging letters, I am sure that he would acknowledge that I have never written him one—not least because I pay him the compliment of assuming that he would have nothing to do with the decision. Therefore, I might as well save my ink.
The hon. Member for Crawley (Laura Moffatt) said that she had been listening to a repetition of the Committee debates on Report. That is not true in my case—partly because I was not on the Committee and partly because I want to allude to remarks made earlier today. The hon. Lady did not speak in Committee apart from one intervention—which I have checked—of which she was proud. I cannot tell whether, in her remarks about additionality today, she was implying that she did not believe in the principle of additionality—contrary to her party's previous position—or whether she did not believe in its relevance to the Government's proposals. I mention the matter because it is of some importance to the debate.
I wish to refer to an exchange I had earlier today with the Minister for Film and Tourism at Question Time. I am sorry that he is the only one of the Secretary of State's ministerial team who is not present. I will not say anything hostile about him; I shall just describe what he said. The Ministers present will recall a remarkable definition of additionality given by the Minister on 21 July 1997, which I quoted on Second Reading.
The issue of additionality arose this afternoon when I asked the Minister—as a supplementary question, following a question from the hon. Member for Burnley (Mr. Pike) about local authority initiatives in tourism—whether the lottery would be paying for English tourism in the future. I do not have access to the Minister's precise reply and we will have to wait for tomorrow's Hansard. However, he said that it was not possible for him to say anything about that matter because, as I would understand, a comprehensive spending review was going on and he could not say who would pay for English tourism in future.
The Minister did say that the issue of whether the lottery should pay for English tourism or not had been discussed. The Minister for Arts shakes his head—

Mr. Fisher: indicated dissent.

Mr. Brooke: When we look at Hansard tomorrow, we will see what the Minister for Film and Tourism said. My hon. Friend the Member for Mid-Dorset and North Poole (Mr. Fraser) was sitting next to me—

Mr. Fraser: indicated assent.

Mr. Brooke: My hon. Friend nods his head in terms of his recollection of the reply. The implication is that a policy or a principle amounts to a prefabricated decision—a standing fact of Government affairs.
If the lottery will not be substituted for spending on English tourism, the Minister for Film and Tourism did not need to make any allusion to it, or to the comprehensive spending review. He could simply have said that lottery funds will not be used on English tourism. He did not say that. I said that I would not be derogatory about him, but a reasonable description—and not an evaluation—would be that his answer rambled a bit. We will see tomorrow precisely what he said, but he certainly did not rule out specifically the lottery paying for English tourism. Against that background, I am left with concern that the principle of additionality is further eroded by the Government.
The Secretary of State corrected me on certain things I said about the consultation when the hon. Member for Forest of Dean (Mrs. Organ) spoke on Second Reading; it was a helpful intervention. All of us are agreed that fewer than 100 individuals contributed to the consultation. The Secretary of State knows that most of the 600 responses came from organisations. It can be no surprise to anyone that organisations would have said that they were in favour of lottery money being spent on what they do. It would be odd if they had not done so, for the very reason that the Minister for Sport gave when referring to begging letters. I am left distinctly uneasy about where the principle of additionality stands this afternoon.
I wish to refer briefly to the arm's-length principle. The hon. Member for Crawley said, effectively, "All power to the Government's elbow. We hope that they spend any money they wish on things of which we approve." I do not want to sound like Nestor. I have said previously that I was not the architect of the national lottery legislation; one could produce a decent-sized architectural practice from those who said that they were that. I simply had a subordinate job in the master mason's department.
The hon. Member for Stalybridge and Hyde (Mr. Pendry), to his credit, has sat through the debate today, and he will recall our debates in the Chamber, in Committee and elsewhere when the legislation was forged. As my hon. Friend the Member for Ashford (Mr. Green) said, one of the principal reasons why this is the best lottery in the world is that the money does not go to the Treasury, and we have avoided it doing so.
The hon. Member for Stalybridge and Hyde will recall our debate about charities, and their fears that they would be disadvantaged by the fact that they would get only 20 per cent. of the money going to good causes. The only evidence we had to engage in that debate was the experience of Irish charities. It was clear that the problem in Ireland, in effect, had been that the money was going back to the Government for the Government to decide which charities should do better. Some said that they had done very well out of the Irish lottery, while others said that they had done badly; it had depended totally on the Government's whim. Au fond, that is why the Opposition are uneasy about what the Government are about.

Mr. Fisher: For these remaining stages of the Bill, it has been good to have the right hon. Member for Cities of London and Westminster (Mr. Brooke)—the former Secretary of State for National Heritage, who introduced the original legislation in the House—here to contribute to our deliberations. All hon. Members recognise that we have had enormous benefits from the national lottery, and that is in no small part—despite his modest denial of any role in the architecture of the legislation—due to the right hon. Gentleman. His seeing it through in the first place has given great pleasure and benefit to the people of this country. His speech was, by a long way, the shortest, most intelligent and most interesting contribution from the Opposition Benches. Before he gets too carried away by my compliments, however, I should add that, given the quality of some of the contributions of his colleagues, that remark is modest.
The right hon. Gentleman asked for clarification on what my right hon. Friend the Minister for Film and Tourism said. My right hon. Friend did not mean to imply that the lottery would ever provide a substitute for Government expenditure on and support for tourism through the English tourist board or the British Tourism Authority. He was referring to the fact that, as the right hon. Gentleman will appreciate, tourism-related matters, such as the arts and heritage—piers at our great seaside resorts, for example—have benefited from the lottery, which has been for the good of tourism and of communities. As my right hon. Friend the Secretary of State said, we are examining arts and heritage as part of the comprehensive spending review.

Mr. Brooke: As the answer of the Minister for Film and Tourism to my question was long, it is a little


surprising that he did not enter the same grace notes as the hon. Gentleman has, with which I have no problem—they were part of the discussions that we had on Second Reading of the original Bill.

Mr. Fisher: I have explained the position of my right hon. Friend and the Government, so perhaps we can move on.
I welcome the hon. Member for East Surrey (Mr. Ainsworth) to his role as shadow Secretary of State. It is good that he is listening to our debate—I hope that he will contribute to discussions later this evening. However, I hope that he has to wait a long time before he succeeds the right hon. Member for Cities of London and Westminster in introducing legislation—he will do well if he introduces legislation that is as constructive and well respected. We shall do our best to ensure that he has a long, patient wait.
It struck me that, the longer the hon. Member for West Suffolk (Mr. Spring)—who led for the Opposition—spoke, the less he had to say. Despite the fact that, amazingly, he spoke for 44 minutes, he did not seem to add much to the interesting speeches that he had made before—strangely, he seems to be taking a long time to grasp that the Government support the principle of additionality every bit as much as the Opposition do. He is obviously yearning to oppose us, but he cannot find much to oppose, as we all agree on additionality. We have supported the principle, which the previous Government introduced, both in our manifesto and in everything that my right hon. Friends the Prime Minister and the Secretary of State have said for extremely good reasons of clarity and, as Mr. Peter Riddell said—he has been much quoted in our deliberations—to prevent the Treasury and other Departments from raiding the funds.
It is important that we maintain additionality and arm's-length principles—I make it clear that the Government are committed to the principle and practice of additionality. Our manifesto said that lottery funds should remain strictly additional to Government expenditure, and the Prime Minister said:
We don't believe it would be right to use Lottery money to pay for things which are the Government's responsibilities.
That could hardly be clearer, but, despite the fact that we said it time and again in opposition and say it again tonight, the Opposition are slow to recognise it.
In our deliberations on the 1993 Act, on the White Paper and on the Bill, we have all agreed that it is extremely hard to define additionality. That is why both this Government and the previous Government decided that it would be sensible not to attempt to define it, but to create a principle to which we could all subscribe and which could be kept in practice. We can argue the toss—we did so in opposition, as some hon. Members have said—but we learned over the years in which the previous Government ran the lottery that that was the most pragmatic way in which to proceed. It is very difficult to find a definition in law that would stand up and bear the necessary test of pragmatic implementation, so, like the previous Government, we believe that the common-sense test is the best.
I can say little more on the subject. We have clearly failed—the failure is mine—to persuade the Opposition that we believe in additionality. I believe that our actions,

and the actions of the arm's-length bodies that distribute lottery funds, demonstrate that belief. I do not think that the people are in any doubt that the sums are in addition to, and do not replace, Government expenditure—the people are under no misapprehensions; they know that, even if the Opposition do not.
The hon. Member for Chichester (Mr. Tyrie), who is no longer in the Chamber, asked what would happen if there were lottery fatigue and the flow of funds dried up. I think that he misunderstands how the lottery funds work—they are project funds for short-term, specific initiatives; not core funding for any of the activities. If he understood that, he would understand why his question was inappropriate.
We have clearly not succeeded in convincing the Opposition, although I believe that we shall persuade the House, as we have persuaded the people. The Government believe in additionality and in the arm's-length principle; we ask the House to reject the proposed measures.

Mr. Spring: I agree entirely with the Minister on one thing: he has totally failed to convince the Opposition or to respond to our points. It is a great disappointment that, instead of dealing in general terms with the arm's-length principle or with additionality in practice, the Government are failing the national lottery and the people's confidence in it.

Question put, That the clause be read a Second time:—

The House divided: Ayes 121, Noes 276.

Division No. 287]
[7.27 pm


AYES


Ainsworth, Peter (E Surrey)
Gillan, Mrs Cheryl


Atkinson, David (Bour'mth E)
Gray, James


Atkinson, Peter (Hexham)
Green, Damian


Baldry, Tony
Greenway, John


Bercow, John
Grieve, Dominic


Beresford, Sir Paul
Gummer, Rt Hon John


Boswell, Tim
Hague, Rt Hon William


Bottomley, Peter (Worthing W)
Hamilton, Rt Hon Sir Archie


Brady, Graham
Hammond, Philip


Brooke, Rt Hon Peter
Hayes, John


Browning, Mrs Angela
Heald, Oliver


Bruce, Ian (S Dorset)
Heathcoat-Amory, Rt Hon David


Burns, Simon
Hogg, Rt Hon Douglas


Butterfill, John
Howard, Rt Hon Michael


Cash, William
Hunter, Andrew


Chapman, Sir Sydney
Jack, Rt Hon Michael


(Chipping Barnet)
Jenkin, Bernard


Chope, Christopher
Johnson Smith,


Clappison, James
Rt Hon Sir Geoffrey


Clark, Rt Hon Alan (Kensington)
King, Rt Hon Tom (Bridgwater)


Clifton-Brown, Geoffrey
Kirkbride, Miss Julie


Collins, Tim
Laing, Mrs Eleanor


Colvin, Michael
Lait, Mrs Jacqui


Cormack, Sir Patrick
Lansley, Andrew


Cran, James
Letwin, Oliver


Davis, Rt Hon David (Haltemprice)
Lewis, Dr Julian (New Forest E)


Dorrell, Rt Hon Stephen
Lidington, David


Duncan, Alan
Lilley, Rt Hon Peter


Duncan Smith, Iain
Lloyd, Rt Hon Sir Peter (Fareham)


Faber, David
Luff, Peter


Fabricant, Michael
Lyell, Rt Hon Sir Nicholas


Flight, Howard
MacGregor, Rt Hon John


Forth, Rt Hon Eric
McIntosh, Miss Anne


Fowler, Rt Hon Sir Norman
MacKay, Andrew


Fox, Dr Liam
McLoughlin, Patrick


Fraser, Christopher
Madel, Sir David


Gibb, Nick
Major, Rt Hon John






Malins, Humfrey
Steen, Anthony


Maples, John
Streeter, Gary


Maude, Rt Hon Francis
Swayne, Desmond


Mawhinney, Rt Hon Sir Brian
Syms, Robert


May, Mrs Theresa
Tapsell, Sir Peter


Moss, Malcolm
Taylor, Ian (Esher & Walton)


Nicholls, Patrick
Taylor, Sir Teddy


Page, Richard
Townend, John


Paice, James
Tredinnick, David


Paterson, Owen
Trend, Michael


Pickles, Eric
Tyrie, Andrew


Prior, David
Viggers, Peter


Redwood, Rt Hon John
Walter, Robert



Wardle, Charles


Robathan, Andrew
Whittingdale, John


Robertson, Laurence (Tewk'b'ry)
Widdecombe, Rt Hon Miss Ann


Roe, Mrs Marion (Broxbourne)
Wilkinson, John


Ruffley, David
Willetts, David


St Aubyn, Nick
Wilshire, David


Sayeed, Jonathan
Winterton, Mrs Ann (Congleton)


Shephard, Rt Hon Mrs Gillian
Winterton, Nicholas (Macclesfield)


Shepherd, Richard
Woodward, Shaun


Simpson, Keith (Mid-Norfolk)
Yeo, Tim


Spelman, Mrs Caroline



Spicer, Sir Michael
Tellers for the Ayes:


Spring, Richard
Mr. John M. Taylor and


Stanley, Rt Hon Sir John
Mr. Stephen Day 




NOES


Adams, Mrs Irene (Paisley N)
Coaker, Vernon


Ainsworth, Robert (Cov'try NE)
Coffey, Ms Ann


Allen, Graham
Connarty, Michael


Anderson, Donald (Swansea E)
Cranston, Ross


Anderson, Janet (Rossendale)
Crausby, David


Armstrong, Ms Hilary
Cryer, Mrs Ann (Keighley)


Ashton, Joe
Cummings, John


Austin, John
Cunliffe, Lawrence


Banks, Tony
Cunningham, Jim (Cov'try S)


Barnes, Harry
Darling, Rt Hon Alistair


Bayley, Hugh
Darvill, Keith


Beard, Nigel
Davey, Valerie (Bristol W)


Bennett, Andrew F
Davidson, Ian


Berry, Roger
Davies, Rt Hon Denzil (Llanelli)


Best, Harold
Davis, Terry (B'ham Hodge H)


Betts, Clive
Dawson, Hilton


Blears, Ms Hazel
Dean, Mrs Janet


Blizzard, Bob
Denham, John


Blunkett, Rt Hon David
Dismore, Andrew


Bradley, Keith (Withington)
Dobbin, Jim


Bradley, Peter (The Wrekin)
Dobson, Rt Hon Frank


Bradshaw, Ben
Donohoe, Brian H


Brinton, Mrs Helen
Dowd, Jim


Brown, Rt Hon Nick (Newcastle E)
Drew, David


Brown, Russell (Dumfries)
Dunwoody, Mrs Gwyneth


Browne, Desmond
Eagle, Angela (Wallasey)


Buck, Ms Karen
Eagle, Maria (L'pool Garston)


Burden, Richard
Edwards, Huw


Burgon, Colin
Efford, Clive


Caborn, Richard
Ellman, Mrs Louise


Campbell, Alan (Tynemouth)
Ennis, Jeff


Campbell, Mrs Anne (C'bridge)
Field, Rt Hon Frank


Campbell-Savours, Dale
Fisher, Mark


Canavan, Dennis
Flint, Caroline


Caplin, Ivor
Flynn, Paul


Casale, Roger
Foster, Rt Hon Derek


Chapman, Ben (Wirral S)
Foster, Michael Jabez (Hastings)


Chisholm, Malcolm
Foster, Michael J (Worcester)


Clapham, Michael
Fyfe, Maria


Clark, Rt Hon Dr David (S Shields)
Gapes, Mike


Clark, Dr Lynda
Gardiner, Barry


(Edinburgh Pentlands)
Gilroy, Mrs Linda


Clark, Paul (Gillingham)
Godsiff, Roger


Clarke, Rt Hon Tom (Coatbridge)
Goggins, Paul


Clarke, Tony (Northampton S)
Golding, Mrs Llin


Clelland, David
Gordon, Mrs Eileen


Clwyd, Ann
Griffiths, Jane (Reading E)





Grocott, Bruce
Marshall-Andrews, Robert


Grogan, John
Martlew, Eric


Gunnell, John
Maxton, John


Hain, Peter
Meale, Alan


Hall, Mike (Weaver Vale)
Michael, Alun


Hall, Patrick (Bedford)
Milburn, Alan


Hamilton, Fabian (Leeds NE)
Miller, Andrew


Hanson, David
Mitchell, Austin


Heal, Mrs Sylvia
Moffatt, Laura


Henderson, Ivan (Harwich)
Moonie, Dr Lewis


Hepburn, Stephen
Moran, Ms Margaret


Heppell, John
Morgan, Ms Julie (Cardiff N)


Hewitt, Ms Patricia
Morgan, Rhodri (Cardiff W)


Hill, Keith
Morley, Elliot


Hinchliffe, David
Morris, Ms Estelle (B'ham Yardley)


Hoey, Kate
Mowlam, Rt Hon Marjorie


Hope, Phil
Mudie, George


Hopkins, Kelvin
Mullin, Chris


Howarth, Alan (Newport E)
Murphy, Jim (Eastwood)


Howells, Dr Kim
Norris, Dan


Hoyle, Lindsay
O'Brien, Bill (Normanton)


Hughes, Ms Beverley (Stretford)
O'Brien, Mike (N Warks)


Humble, Mrs Joan
O'Hara, Eddie


Hutton, John
Olner, Bill


Iddon, Dr Brian
O'Neill, Martin


Jackson, Ms Glenda (Hampstead)
Osborne, Ms Sandra


Jackson, Helen (Hillsborough)
Palmer, Dr Nick


Jamieson, David
Pearson, Ian


Jenkins, Brian
Pendry, Tom


Johnson, Miss Melanie
Pickthall, Colin


(Welwyn Hatfield)
Pike, Peter L


Jones, Barry (Alyn & Deeside)
Plaskitt, James


Jones, Mrs Fiona (Newark)
Pollard, Kerry


Jones, Helen (Warrington N)
Pond, Chris


Jones, Ms Jenny
Pope, Greg


(Wolverh'ton SW)
Prentice, Ms Bridget (Lewisham E)


Jones, Jon Owen (Cardiff C)
Prentice, Gordon (Pendle)


Jones, Dr Lynne (Selly Oak)
Prescott, Rt Hon John


Jones, Martyn (Clwyd S)
Primarolo, Dawn


Keeble, Ms Sally
Prosser, Gwyn


Keen, Alan (Feltham & Heston)
Purchase, Ken


Khabra, Piara S
Quin, Ms Joyce


Kidney, David
Quinn, Lawrie


Kilfoyle, Peter
Rammell, Bill


King, Andy (Rugby & Kenilworth)
Rapson, Syd


Kingham, Ms Tess
Raynsford, Nick


Ladyman, Dr Stephen
Reed, Andrew (Loughborough)


Lawrence, Ms Jackie
Reid, Dr John (Hamilton N)


Laxton, Bob
Roche, Mrs Barbara


Lepper, David
Rogers, Allan


Levitt, Tom
Rooker, Jeff


Lewis, Ivan (Bury S)
Ross, Ernie (Dundee W)


Lewis, Terry (Worsley)
Rowlands, Ted


Liddell, Mrs Helen
Roy, Frank


Linton, Martin
Russell, Ms Christine (Chester)


Lock, David
Salter, Martin


Love, Andrew
Sawford, Phil


McAllion, John
Sedgemore, Brian


McAvoy, Thomas
Sheerman, Barry


McCabe, Steve
Sheldon, Rt Hon Robert


McCafferty, Ms Chris
Simpson, Alan (Nottingham S)


McCartney, Ian (Makerfield)
Singh, Marsha


McDonagh, Siobhain
Skinner, Dennis


McDonnell, John
Smith, Rt Hon Chris (Islington S)


McFall, John
Smith, Miss Geraldine


McIsaac, Shona
(Morecambe & Lunesdale)


McKenna, Mrs Rosemary
Smith, Llew (Blaenau Gwent)


McNamara, Kevin
Soley, Clive


McNulty, Tony
Southworth, Ms Helen


Mactaggart, Fiona
Spellar, John


McWalter, Tony
Squire, Ms Rachel


Mahon, Mrs Alice
Starkey, Dr Phyllis


Mandelson, Peter
Steinberg, Gerry


Marsden, Gordon (Blackpool S)
Stevenson, George


Marshall, David (Shettleston)
Stewart, David (Inverness E)


Marshall, Jim (Leicester S)
Stewart, Ian (Eccles)






Stinchcombe, Paul
Watts, David


Stoate, Dr Howard
White, Brian


Stringer, Graham
Whitehead, Dr Alan


Stuart, Ms Gisela
Williams, Rt Hon Alan


Sutcliffe, Gerry
(Swansea W)


Taylor, Rt Hon Mrs Ann
Williams, Alan W (E Carmarthen)


(Dewsbury)
Williams, Mrs Betty (Conwy)


Taylor, David (NW Leics)
Wills, Michael


Thomas, Gareth (Clwyd W)
Winnick, David


Tipping, Paddy
Winterton, Ms Rosie (Doncaster C)


Todd, Mark
Wise, Audrey


Touhig, Don
Wood, Mike


Trickett, Jon
Woolas, Phil


Truswell, Paul
Wright, Anthony D (Gt Yarmouth)


Turner, Dennis (Wolverh'ton SE)
Wright, Dr Tony (Cannock)


Turner, Dr George (NW Norfolk)
Wyatt, Derek


Vaz, Keith



Vis, Dr Rudi
Tellers for the Noes:


Walley, Ms Joan
Mr. Kevin Hughes and


Wareing, Robert N
Jane Kennedy.

Question accordingly negatived.

New clause 4

WINDING UP OF FUNDS ALLOCATED UNDER SECTION 22(3)(c)

`() In section 30 of the 1993 Act (winding up of funds allocated under section 22(3) (e)) after subsection (3) there shall be inserted:

"Within one year of exercising its powers under section 28(1) the Secretary of State shall—

(a) prepare a report containing an assessment of the performance of the bodies which distribute money under section 25(1) of the 1993 Act;
(b) set out the criteria governing the reallocation of sums held under section 22(3)(e); and
(c) consult any body which distributes money under section 25(1) and other interested bodies".'. —[Mr. Maclennan.]

Brought up, and read the First time.

Mr. Maclennan: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With this, it will be convenient to discuss the following amendments: No. 8, in clause 6, page 7, line 23, leave out from beginning to end of line 10 on page 8 and insert—
'(1) In relation to any sum that is paid into the Distribution Fund under section 21(2) of the 1993 Act after 31st December 2000, section 22(3)(e) of that Act shall have effect as if for "on projects to mark the year 2000 and the beginning of the third millennium" there were substituted "on or connected with education, environment and public health, including children's play.".
(2) Section 30 of the 1993 Act (winding up of fund allocated under section 22(3)(e)) shall cease to have effect.
(3) The Secretary of State may by order substitute a later date for the date that is for the time being specified in subsection (1).'.
No. 1, in page 7, line 43, at end insert—
'(6A) In section 28 of the 1993 Act (power to amend section 22) in subsection (2)(a) for "5 per cent." there shall be substituted "13i per cent".'.

Mr. Maclennan: I have pleasure in moving the new clause and I shall be brief. It is designed to enable the Minister to give some indication of what the Government propose following the winding-up of the Millennium Commission in respect of the substantial expenditure involved. There is anxiety, particularly in the

voluntary sector, that the money is in a sense floating money, which could be diverted from good causes to other, no doubt desirable, public spending objectives—I can candidly declare that the new clause was suggested by the National Council for Voluntary Organisations. There is also concern that the very fact that that shift will take place might impact on the ability of voluntary organisations to attract funding and it is certainly appropriate to raise those fears well in advance.
The Government should be able to give undertakings that they will consult widely with the voluntary organisations and the other good causes about how best to utilise the money, bearing in mind the Government's expressed commitment to the additionality principle, which was underlined in the previous debate and which I do not call into question in general.
The new clause also suggests an appraisal of the work that has been done by the existing distributing bodies, which must be appropriate and sensible when considering how best to deal with moneys that will not be spent in the future. Of course, it is difficult to predict what the volume will be by that time and whether it will have peaked and be on a downturn, but that would only make that course of action more urgent. I hope that the Government will find the new clause helpful and that it will enable them to give us some glimmerings into their thinking.

Mr. Spring: We have listened with interest to the comments of the right hon. Member for Caithness, Sutherland and Easter Ross (Mr. Maclennan). I was not clear whether he would press the new clause to a Division. I hope to secure your permission, Mr. Deputy Speaker, to separate amendments Nos. 8 and 1, which we have tabled, from the new clause if necessary.
The amendments in this group deal with the Government's raid on the original good causes and the need to protect those causes. The reason for the raid is simple. The Government made a series of promises in opposition that were incompatible with the tight control of public expenditure. Indeed, once a week we have had the sight of the Prime Minister having to defend the fact that those early pledges, particularly on health and education, have not been borne out in practice and that, in fact, the reverse has happened. That is part and parcel of the problem. Given the Chancellor's views on public expenditure, Ministers are scratching around for alternative sources of cash to pursue the political agenda that is inherent in the new opportunities fund. As a result, the lottery, which was set up as a fund to pay for projects that would, in the words of the 1992 Conservative manifesto,
restore our heritage and promote projects which will become a source of national pride",
is, if Royal Assent is obtained, to turn into the milch cow for Ministers to supplement their departmental budgets by raiding it for that express purpose, through the generosity of the Secretary of State.
7.45 pm
Even under the Government's original plans, the good causes would have lost out. The National Lottery etc. Act 1993, which was enacted under the former Conservative Government, provided for the Millennium Commission, which finances projects to mark the millennium, to be wound up once the celebrations are over and the projects


all paid for. That money would have been re-allocated to the other good causes. However in 1996, the Labour party in opposition decided that it would not reallocate the money to the original good causes but would set up its own fund to subsidise the budgets of other Departments.
Let us be clear. Under a Labour Government, the original good causes were always destined to lose out; it was only a question of when. None of the amendments would prevent the Government from setting up the new opportunities fund. They deal with the fundamental problem of the Government's smash-and-grab raid on the lottery.
Amendment No. 8 deals with whether the new opportunities fund should replace the Millennium Commission, as was promised in Labour's manifesto, or whether it should simply elbow its way to the front of the queue as a sixth good cause. In view of the threat to the lottery, we also want to establish a minimum percentage below which the share of the proceeds of the lottery allocated to the original good causes will not fall. We are concerned that the Government will try to take an increasing percentage of the proceeds of the lottery for their own new good cause and we were not at all assured by the so-called assurances of the Minister for Sport in Committee. I hope that this evening he will give us further assurances, as they have not thus far been satisfactorily forthcoming.
In respect of making the new opportunities fund a replacement for the millennium fund, amendment No. 8 would give the Government the opportunity to honour their manifesto commitment on the lottery. I remind members of the Standing Committee that we had the truly appalling sight on a number of occasions of Labour Members voting against their manifesto commitment—a ludicrous situation. Accepting the amendment would restore to the original good causes some of the money that they will lose under the Government's plans.
In its manifesto, the Labour party gave a commitment to create a new millennium fund—what is now called the new opportunities fund—to replace the existing fund. Indeed, the 1997 manifesto, "New Labour, because Britain deserves better", stated:
Labour has already proposed a new millennium commission to commence after the closure of the Millennium Exhibition, to provide direct support for a range of education, environment and public health projects, including those directed at children's play, currently excluded from the lottery".
The Opposition's amendments would give effect to that commitment.
Perhaps the House would care to reflect here on the irony of the Government, barely a year in office, facing the embarrassment of being held to implementing their manifesto commitments by the Opposition. I accept that this may be small beer compared with the appalling travesty as regards the early pledges, which have simply not been carried out—the growth in waiting lists and the difficulties in education—but it is a principle of considerable importance for the continuation and success of the national lottery.
We are giving the Government another opportunity to consider their over-hasty raid on the lottery and the damage that the Bill will do to the original good causes by depriving them of money that they had expected. We ask the Government to think about the damage that they are doing to the lottery by turning it into a form of

voluntary taxation from which to subsidise general public expenditure on health, education and the environment. The Government have brought forward the creation of the new opportunities fund to let them get their hands on the lottery as soon as possible.
The Bill will mean that the arts, charities, sport and the heritage will lose one sixth of the proceeds of the lottery until the Millennium Commission is closed, and a fifth of the proceeds thereafter. That results from the Government's decision to introduce their own good cause before the Millennium Commission is wound up. The new opportunities fund, to which we object in principle, was conceived as a replacement for the millennium Fund, not as an additional sixth good cause.
The Government are so hemmed in by the embarrassment arising from their failed pledges and their performance on health and education, and by their self-imposed public spending constraints on the Chancellor, that they are desperate for cash. The lottery is the ready source. As has been said, the real lottery winner will be the Chancellor, at the expense of good causes up and down the country.
Labour announced its decision to set up the new opportunities fund before the closure of the Millennium Commission only during the general election campaign. There was no mention of the effects that it would have on the good causes, or on the lottery. It was not made clear then, and the Government have persistently failed to admit it since, that the original good causes are losing as a result of the switch. Sums in the region of £140 million to £150 million will be taken from the good causes and put into the so-called shadow account for distribution after Royal Assent.
The good causes would, of course, have lost out anyway. They had previously expected the Millennium Commission's share to be divided among them when it was wound up. When the decision to bring forward the new opportunities fund was announced, Labour claimed that it had been made possible only by the Wednesday draw. That was complete nonsense, and they knew it. The only reason why the original estimates of about £9 billion rose to about £10 billion was the spectacular success of the first year of the operation, which far exceeded expectations. A midweek draw was always planned, as well as scratch cards and the other games that have been introduced. The Wednesday draw was not an unexpected windfall, and it is nonsense to suggest that it generates a finite sum.
The fact is that the Government wanted to get their hands on the lottery money as soon as possible and were prepared to set up a new good cause to do so, even if it meant taking from existing good causes. In Committee, the Minister acknowledged for the first time that the Government had brought forward their raid on the arts, charities, heritage and sport by saying:
when we first proposed the new good cause in our manifesto and in the lottery documents published before the election, we anticipated that it should follow the running down of the Millennium fund. We have had second thoughts, however, which is perfectly reasonable. We were surprised and pleased at the strength of support for the new good cause. As it was so widely welcomed, it seemed perverse and unnecessary to delay it for several years. As it was supported by the public… we feel that if the content is right we should go ahead now, be decisive and get on with it.
The Minister could offer no credible justification for why the Government should have brought forward the date of their raid, except political expediency. He was not


prepared to admit that they simply wanted to get their hands on the money. He claimed, unconvincingly, that the proposals were popular—though he presumably did not mean popular with the new causes, which do not share his view. The Minister refused to make public the details of consultation with existing good causes. I asked him to do so, and he talked about some sort of seamless flow. I fear to say that that was not a particularly satisfactory answer.
The Minister has claimed that the distributing bodies agreed. However, he was not so definite in Committee. There was no suggestion then of agreement. He said:
We have running discussions and consultations with all the distributing bodies. They are fully aware of the plans and happy with them. Consultation is not an exercise, but a continuous process …It has always been made clear that the other distributing bodies will receive £1.8 billion each, and they have accepted that. That was the understanding on which they planned …The distribution bodies have always accepted that figure; it is the basis on which they have been able to plan. The important thing was the amount of money that they were to receive—£l.8 billion. They will still receive precisely that sum."—[Official Report, Standing Committee A, 28 April 1998; c. 45–46.]
What a contrast those assertions make with the responses to the Bill made by the original good causes. Many people who have an interest in this subject because of their involvement in the distributing bodies—for example, Lord Gowrie and Lord Rothschild—make a very different interpretation. It is absurd to suggest, as the Minister does, that they are delighted and pleased that traditionally under-resourced parts of our economy that are always put at the back of the Treasury queue will once again be hit severely by this raid.
Labour Members should be grateful to have the opportunity to make sure that the Government keep at least one of their promises. The amendment will let them clear their consciences by doing that. By accepting the amendment, the Minister would ensure that the original good causes continued to get the percentage of lottery proceeds that they were originally promised, rather than the reduced percentage that will result from the premature creation of the new opportunities fund.
Amendment No. 1 deals with the setting of a minimum percentage share for the good causes. The great fear of the original distributing bodies is that the Bill is the beginning of a remorseless chipping away at their resources. They are concerned that the Government plan to take a growing percentage of the proceeds of the lottery to pay for their own new good cause. The bodies fear that this is the beginning of a series of raids.
The Bill is specifically designed to ensure that that happens. Despite being pressed on Second Reading by a number of my hon. Friends—including my right hon. Friend the Member for Huntingdon (Mr. Major)—and being pressed again in Committee, the Government have failed to undertake to adhere even to the reduced new percentage allocations contained in the Bill. I extend to the Minister, once again, the opportunity to give that assurance, and I should be delighted if he did.
In Committee, the Minister claimed that it was absurd of the Opposition to want to amend our own National Lottery etc. Act 1993. He was being somewhat disingenuous; he knows that no Government would have had any incentive under the 1993 Act to divert money

from one distributor to another. It is different now. The Secretary of State is, in effect, setting up a political fund under his own direct control. He is introducing sweeping powers that will enable him to gerrymander the distribution of lottery money. He is changing the very basis on which the lottery operates and on which it has been such an enormous success. The Government now have an incentive to vary the percentages even further to favour their own good causes, and that is why existing good causes are worried.
I have repeatedly said that it is dangerous to set a precedent for future Parliaments by entrenching in legislation the opportunity for some future Secretary of State to abuse the lottery for political reasons and to change the balance of the lottery in a way that is deeply destructive to the lottery and the under-resourced good causes. The Government are not prepared to offer genuine reassurance to the good causes, and that is why we are resisting the Bill.
As so often with this Bill, it is not the introduction of a single power but the combination of powers, a sort of block building of centralisation of control, that puts a dangerous amount of control in the hands of the Secretary of State. The apparently harmless power to vary the percentage allocation to each good cause in the original Act can be combined with the creation of the new opportunities fund to allow, in theory, the diversion of up to 75 per cent. of money for good causes, and eventually 80 per cent. to the Government's own good cause.
The Government repeatedly resisted this amendment, which was tabled perfectly reasonably by Conservatives and Liberal Democrats in Committee. They combine lukewarm assurance of their good intentions to the good causes with an abject failure to give them statutory effect. They have failed to commit to a percentage for the good causes but say only that the good causes would get £9 billion if the proceeds reached £10 billion. They will not commit even to the reduced percentage share in the event of proceeds exceeding £10 billion, as Camelot confidently predicts that they will. Will they commit to percentages in the Bill today? We await an answer.
8 pm
The Government also made it clear that, in the event of a shortfall, the original good causes will lose out, meaning that there is a possibility of a further fall for them. As Conservative Members have noted, there is always the risk of lottery fatigue, which has been seen in other countries. What assurances can the Minister give against the possibility of revenue shortfall for the good causes, including sport, that are so genuinely concerned about the matter? The Government will not even give a commitment that the original good causes will continue to receive any money at all after the current licence expires in 2001. Will they give clear assurances today?
This is an opportunity for the Government to show good faith and to set a percentage floor below which the good causes will not fall. The minimum share that we propose would not have been necessary without the creation of a new good cause under the direct control of the Secretary of State. The Bill centralises far too much power in his hands.
The new good cause is radically different from the previous ones. The 1993 Act sets out the five areas to be supported by the national lottery on an equal percentage


basis: the arts, sport, national heritage, charity and the millennium. The money was to be drawn on by distributing bodies to make grants to such projects as they chose to support, within their terms of reference. The Secretary of State had no power to tell them what projects to support. The new opportunities fund is to have no such freedom.
As the Government's note on clauses 6 puts it:
rather than providing general support to its sectors as the other distributors do, it will support a rolling programme of specific initiatives. These will be determined by the Secretary of State.
The first three initiatives are to be IT training for teachers and librarians, out-of-school-hours activities and healthy living centres. The Government claim that such initiatives are consistent with the arm's-length principle. They are not. The new opportunities fund will simply be a Government agency with limited operational autonomy. What is to stop the Secretary of State diverting more and more lottery money to the new opportunities fund at the expense of other good causes? We have not had a satisfactory answer.
We have already been told that the new cause's share will rise to 20 per cent. in 1999 as millennium spending tails off. Why not 25 or 50 per cent? There is nothing in the Bill to stop it. The existing percentages can be varied by ministerial order, and it would be tempting to do so. To set a precedent and give a future Secretary of State the opportunity to do that in an unscrupulous way would be a terrible legacy of our consideration of the Bill.
The sums involved are not negligible. The distributors have so far had about £5 billion. The good causes can expect another £5 billion over the next three years. The Secretary of State is at liberty to channel up to £3.75 billion out of the expected £5 billion to the new opportunities fund. He does not have to give the five other distributors more than 5 per cent. each of the total. That minimum of 5 per cent. was put into the 1993 Act before this voracious new cause made its appearance. That is at the heart of the difficulty.
In view of the changed nature of the national lottery and of the composition of the good causes, we believe that the percentage is too low. It does not sufficiently curb the Secretary of State's political appetite, now or in future. To put it simply, we wish to raise the minimum percentage for all the causes to 13.33, the present percentage allocated for the new opportunities fund. The effect would be to ring fence £3.3 billion of the £5 billion for the five original good causes, as opposed to only £1.25 billion under existing legislation. The Secretary of State would still have the flexibility to give the new opportunities fund more than the others, but not nearly as much flexibility, with all its inherent dangers, as now. I ask again whether the Minister will give a binding undertaking that in this Parliament, he will not reduce the level below 16.67 per cent.
The arts, sport, heritage, the charities and even the millennium fund should have such protection. It is with that protection that the distributing bodies have carried out their work effectively and won the confidence of so many recipients of lottery money. The Bill, with its centralising powers and the ability given to the Secretary of State to interfere in the smooth working of the lottery, demands that if the lottery is to continue to be the success that it has been in the past and should be in future, the good causes need proper protection. The Bill as it stands

makes that more unlikely. The minima required to make it work are something that we urgently wish to raise once again for the Government's consideration, in the hope that, even at this late stage, they will think again.

Mr. Fraser: I wish to confine my comments to the protection of the good causes, as mentioned by my hon. Friend the Member for West Suffolk (Mr. Spring). We all accept that the national lottery has so far exceeded expectations. The original good causes had expected to benefit from public enthusiasm and support and to receive their fair share of the £1 billion excess projected over the first seven years of the lottery's operation. Not least, they expected the Government to keep their general election promise that the new opportunities fund would be introduced to replace the millennium fund. There is now a sixth good cause, as well as the National Endowment for Science, Technology and the Arts. Everyone's relative share can only fall. That means that the original good causes will inevitably lose out.
The White Paper is worth quoting. It says:
Although the existing good causes will be receiving a smaller share of Lottery revenue, the success of the Lottery means that they can still plan on receiving the same amount in total as was envisaged when the Lottery was set up".
The Secretary of State is telling the good causes that they will get less in future. They will get the same amount as was predicted when the lottery was set up as a paper concept. They are being told to forget the years of success and not to worry that the Government will not establish a minimum percentage below which their share of the proceeds will not fall. They must press on and be grateful for what they can get.
Our amendments give the Government the opportunity to honour their manifesto promise that the new opportunities fund should replace the millennium fund. As the Bill stands, the Government have brought forward the creation of the new opportunities fund so that they can get their hands on the lottery money as soon as possible. The Treasury is, after all, desperate for cash that only the lottery can provide.
Public awareness of that grab-for-cash policy is growing. Hon. Members may have seen newspaper reports that the Treasury will take 20p on every lottery ticket when the sixth good cause is introduced. Independent research was carried out by David Wornham, senior lecturer at Bristol business school, and quoted in The Daily Telegraph on Monday25 May. The article stated:
Mr. Wornham said: 'One of the most disturbing findings is people's assumptions of where the money goes. The public believes that between 15p and 20p in the pound finds its way to charities.
In reality, the figure is less than 6p—and that doesn't take into account how much charities have lost from a drop in charitable contributions since the lottery began. To find out where the money is going,' he said, 'you need look no further than the Exchequer.
Once direct and indirect taxation is taken into account, together with the use of lottery money to replace public expenditure, the Government's "cut" upon realisation of the new sixth cause will turn out to be over 20p in the pound, not the published figure of 12p.'
I could go on, but that illustrates my point and provides confirmation, if confirmation is needed, that the real lottery winner is the Chancellor of the Exchequer. To rub salt in the wound, the Government continue to dispute that the existing good causes will lose out, which is quite incredible when one considers the evidence. If public


confidence in the lottery starts to fall, not least because of newspaper reports such as the one I have just quoted, they will really start to feel the pinch.
The fact that the Secretary of State can involve himself completely justifies the concern expressed by my hon. Friends. The Secretary of State will involve himself and decide on the scope and direction of his involvement at a whim and a fancy. Having recognised that as a dead certainty, we seek through our amendments to limit the powers of the Secretary of State and to limit the amount of money he can divert into the Government's new opportunities fund at the expense of the original good causes. To guarantee them an allocation of 13.33 per cent. offers them a future, albeit a lean one; at the moment, they fear for the future and face the prospect that the Government plan to take an ever-increasing percentage of the proceeds for their own salvation.
The current model of awards is transparent and free from accusations of political gerrymandering. Ministers cannot tell us how that positive characteristic will be safeguarded in future—I hope that the Minister will answer that question this evening. If they believe that there should be safeguards, the Government should be happy to give an undertaking to the original good causes, which they currently cannot and will not do. Instead, the Government have every good reason to vary the percentages even further in future to the benefit of the new opportunities fund as the economic situation inevitably worsens and the calls for health, education and environment spending increase.
The Government have made it clear that, in the event of a shortfall, the original good causes will lose out. The Government's apparent lack of support for the good causes increases the concern felt by those good causes and poses the question: what does the future hold for the good causes? I suspect that their future is not particularly rosy, given the wide range of opportunities for Government interference offered by the Bill. They do not even have the comfort of an assurance that they will continue to receive money after the current licence expires in 2001. I should like the Minister to give an assurance today on the future of the good causes.

Mr. Green: I shall speak mainly to amendments Nos. 8 and 1, but I shall first briefly address new clause 4. I regret the absence of the right hon. Member for Caithness, Sutherland and Easter Ross (Mr. Maclennan) in more than the usual formal sense in which those words are used in the House, because I am genuinely unsure about whether I have completely understood what he wants to achieve with his new clause. As I understand it, he wants to constrain the behaviour of the Secretary of State after the millennium fund has been wound up. That seems perfectly sensible and there is much to be said in favour of such a course of action, but, in a form of argument that will be familiar to those of my right hon. and hon. Friends who have attended debates at the Conservative party conference, I disapprove of the new clause because it does not go far enough.
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If it is sensible to restrain the behaviour of the Secretary of State after the winding up of the millennium fund,

it would be equally sensible to do so now, especially in the context of the Bill which brings so much power over distribution under the Secretary of State's purview. One of the principal objections to the Bill has always been that it involves the nationalisation of large parts of the lottery distribution mechanism, turning it from a national lottery into a nationalised lottery. That lies at the root of many of the Opposition's objections to the Bill. One of the purposes of amendments Nos. 8 and 1 is to retain some independence for those bodies distributing to the good causes that have done so well over the past four years.
I am sure that the Minister will advance once again the specious argument that we heard several times in Committee; that the cake has got bigger, so it does not matter that the percentage of the cake that the existing good causes are to get is being reduced, as they were planning to receive only that amount of cake anyway. There are two reasons why that is an invalid and specious argument. First, if it can be done once, it can be done again. All the good causes will rightly realise that they have become a target for Ministers of this and future Governments—that they are seen as a convenient way of relieving public spending pressures in almost any circumstances. That will have a direct effect on the way they act from now on. The danger is not merely a theoretical possibility for the future, as many of the things the good causes do involve long-term planning; if they are less sure of the level of funding they are to receive for many years ahead and if they are to act prudently, as most do, they will not commit themselves to large projects or long-term revenue funding. That in itself will be damaging.
Secondly, the good causes are being cheated out of money. They recognised that the cake was growing faster than was originally forecast and planned accordingly. It is undeniable that the demand for bids has improved both in quantity and in quality over the years, as more bodies have got used to the methodology of bidding and worked out how to put together a successful bid. All the distributing bodies say that they would like to pass a higher proportion of bids now than they did two or three years ago, simply because they are generally of better quality, but the result of the Bill is that they will be able to pass only a lower percentage than before, which will be extremely damaging.
The ability to plan ahead will be particularly affected, and that will be increasingly harmful. In the past, large capital projects have been funded, but we all accept that, in future, lottery funding will move towards revenue funding. If the good causes feel that they have to cut off revenue funding after two or three years, future artists and athletes may not be given the opportunities that they deserve and that they could be given under the lottery as currently constituted.
Existing good causes will know that the new opportunities fund is open ended and can be expanded to almost any extent. The Bill would allow expansion to continue, so the good causes would be right to be even more fearful about the future as the opportunities for political manipulation introduced by the Bill become ever more attractive to future Secretaries of State.
The present division is crude but fair. Nobody would argue that there is any great science in deciding that five good causes should each receive 20 per cent. of the money. We could have had endless arguments about whether charities were more worthy than the arts and


whether sport was more worthy than heritage. The simple method—which has, as far as I know, received barely a murmur of protest—of dividing the cake five ways by giving 20 per cent. to each cause is seen to be perfectly fair. In this case, complication is the enemy of trust in the long term. By introducing complication into the distribution mechanism, the Government are eroding the trust that exists between them and the distributing bodies. That is likely to damage the bodies' morale and the amount of good that they can do.
I urge the Government to accept the amendments, which are in no way wrecking amendments. They would not stop the Government setting up the new opportunities fund or taking any of the significant measures in the Bill. If the House has a surprising burst of sanity and accepts the amendments, it will enshrine protection for the existing good causes so that although the Government could set up the new opportunities fund, that would not cause the collateral damage to the good causes that the Bill will inflict. I urge the Minister to have a last minute change of heart and accept the amendments.

Mr. Prior: It is rather sad that we have to debate amendment No. 1, which would increase the minimum allocation from 5 to 13.33 per cent. We should not feel obliged to do so. We are debating it because Conservative Members are genuinely concerned about protecting the good causes. The lottery has been a tremendous success, as has the distribution of lottery funds, but, over the past few months, in Committee and in debates in the House, many Conservative Members have come to feel that we can no longer trust the Government to ensure that the money is spent properly.
We do not trust the Government because we are not convinced by their defence of the additionality principle. We are convinced by the Bill's wording that the lottery can no longer be described as being at arm's length from the Government. The combination of those two aspects of the Bill makes us feel the need to increase the minimum percentage allocation to protect the good causes.
What leads me to distrust the Government is the fact that they are legislating retrospectively and have been fiddling around with shadow accounts. There was no need to do that. If they had been honest, they could have increased the percentage to the new opportunities fund later, but they did not want to. They deliberately made the Bill retrospective to make it appear as if the percentage was less. That was a deeply unnecessary and reprehensible act. The Government will grab as much money as they possibly can to use for their own purposes. That was not the intention behind the lottery; it was not even the intention of the Government when they were in opposition, when they fought strongly for the additionality principle.
It is vital to protect the interests of good causes, first, for the sake of the lottery. As long as people see that the lottery is independent and that the money goes to good causes, not mainstream public spending, they will continue to play it. The danger of lottery fatigue setting in will be greater if the Bill is implemented.
We are anxious to protect good causes, secondly, for the sake of good government. It is important that taxation is transparent. The taxpayer and the electorate should know where the money comes from to finance public spending. This is sleight of hand—the Government are

taking money from good causes to fund their pet projects. I do not necessarily disagree with the projects that they are spending the money on, but it is wrong that the money is being taken from the lottery.
The third reason why it is important to protect good causes is for the sake of the causes themselves. If lottery fatigue sets in and, over time, the causes that are supported by the distributing funds spend the money on revenue rather than capital, it is essential that they have a longer and longer time horizon. If there is in the background the permanent threat that the Government may take more money away from the good causes, that will undermine the causes in the long run.
For those three reasons I support, with some sadness, the proposed increase in the minimum allocation from 5 per cent. to 13.33 per cent.

Mr. Brooke: I declare an interest as the chairman of a trust involved in archaeology and ecology in the Andes, primarily in Peru, which has made an application to the National Lottery Charities Board. I see concern written on the face of the Minister for Sport; I give him a categorical assurance that I shall not communicate or correspond with him about it. I mention that body because, as the hon. Member for Stalybridge and Hyde (Mr. Pendry) will recall, it was the charities' concern about their allocation in the original Act that occasioned a fair amount of debate between us.
There was a recognition that, as the Millennium Commission money ran out with the coming of the millennium, there would be an opportunity to consider the reallocation of the money and whether the charities should receive more. At that stage, we would know how they had spent the money so far. In that respect, I agree with new clause 4, which has been tabled by the right hon. Member for Caithness, Sutherland and Easter Ross (Mr. Maclennan) as it relates to the purpose of a review.
I have not had a briefing by the National Lottery Charities Board, which is my constituent. In the fourth sitting of the Standing Committee, on 30 April, my hon. Friend the Member for Eastbourne (Mr. Waterson) referred to such a briefing. I am not in any way acting on behalf of the board. I apologise for some unfamiliarity with the narrative. When I was a child, my mother taught me at her knee what I always believed to be a verse from the Old Testament: man look not back at the furrow ploughed by thee. I have never been able to find it in holy writ, but I have not given up hope. I do not spend much time revisiting my past and, if I am unfamiliar with any detail, I apologise.
My recollection is that the Home Office was originally responsible for the National Lottery Charities Board. I was conscious that my right hon. Friend the Member for South-West Surrey (Mrs. Bottomley), who was then Secretary of State for National Heritage, received into her Department the voluntary activity that had previously been looked after by the Home Office. I do not know whether she took responsibility for the charities fund at the same time, but I am conscious that the Government have moved the voluntary activities back into the Home Office. If the Government are creating a new good cause, it is a little illogical to spend money on issues that have nothing to do with the Department for Culture, Media and Sport when they criticised the earlier movement of voluntary activity to the Department of National Heritage.
I say, as a bystander, that there has been a lack of coherence in the development of the Government's thinking. There was a Stephen Leacock character who jumped on his horse and rode off in four directions at once. There has been an element of that in the transmogrification of the Government's policy, which has been curious in view of the emphasis that they have placed on strategy and their criticism that there was a lack of strategy in the previous thinking.
I believe that the Minister for Sport will reply to the debate, and I welcome the opportunity to hear from him more precisely what the Government's intentions are. I do not know whether, in his responsibility for heritage buildings, he has been high over the nave in Wells cathedral, but if he has he will have seen etched on the floor the design work of the masons in the middle ages, which is still visible 500 or 600 years later. We shall see the Minister for Sport set out such markings, and we shall have an opportunity to verify them over the next five years. I had profound sympathy with the observation by my hon. Friend the Member for Ashford (Mr. Green) that complication is the enemy of trust in these matters. The simpler the Government can make what they intend to do, the better it will be for the lottery.

Dr. Julian Lewis: I should like to add to my considerable reputation for parliamentary eccentricity by saying that I was always doubtful about the whole concept of the lottery. I felt that it would damage existing charities and drain from them funds that would otherwise go directly to them. My outlook was probably soured by the brilliance of George Orwell's description in "Nineteen Eighty-Four" of the effects of a lottery in a totalitarian society. He said:
The Lottery, with its weekly pay-out of enormous prizes, was the one public event to which the proles paid serious attention. It was probable that there were some millions of proles for whom the Lottery was the principal if not the only reason for remaining alive. It was their delight, their folly, their anodyne and their intellectual stimulant.
I thought that, with such a start, the lottery could only be a somewhat corrupting force in society. The Bill shows that it is also corrupting the Government. Effectively, the Bill is the second stage in the Government's attempt to make good their promise to try to keep their spending and tax-raising targets at Conservative levels. The first stage of that attempt was the raid on the pension funds and the second stage—

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. We are debating the new clause and the amendments. We are not worried about possible inequities of the lottery. Perhaps the hon. Gentleman could hang his jacket on that peg.

Dr. Lewis: The amendments seek to ring fence the amount that will be available for good causes. Good causes were nominated to enable money that formerly went to charities to continue to be spent on such activities. There is an attempt to get away from the safeguards that were provided for the lottery. That is part of a general, corrupting strategy to enable the Government to get their hands on money that, had the lottery not been created,

would have gone to charity. That charitable money will be used for Government expenditure. I predict that this is not the last time that such an unethical sleight of hand will be employed.

Mr. Banks: The hon. Member for New Forest, East (Dr. Lewis) described himself as eccentric. That is a middle-class word for loony, and he adequately proved his case. The lottery has been a great success and the hon. Gentleman was wrong to oppose it. People go in for the lottery because they want to win oodles of cash. I do not wish to strip away all the talk about good causes, but that is why I go in for it. So far, I have been unsuccessful, apart from a few tenners here and there, but I dream about the big one coming along, as do many people. As I fail, week after week, to win the biggie, I have the consolation of knowing that money is going to good causes. It is clear that people do the lottery to try to win prizes.
The right hon. Member for Cities of London and Westminster (Mr. Brooke) spoke about Wells cathedral. I have never been high in the nave of that cathedral—I have never been high anywhere—but I was interested to hear that the right hon. Gentleman will not spend much time revisiting his past. According to the interests that he declared, he will spend some time in Peru.
The Opposition amendments demonstrate two matters. First, they show the Opposition's inability to decide their position on the new good cause. As my hon. Friend the Minister for Arts said, in Committee and on Second Reading, the Opposition argued that there was something intrinsically wrong about spending lottery money on health, education and the environment. However, amendment No. 8 accepts the idea in principle, merely postponing it for a few years. Secondly, the amendments demonstrate the Opposition's failure to recognise that we are not harming the existing good causes. They are receiving the £9 billion that everyone expected them to receive when the lottery started.
Perhaps it is rather odd to say in this place that there comes a point when we ought to try to trust each other. [Interruption.] I knew that Opposition cynics would not accept that. They have described my right hon. Friend the Secretary of State as if he were Josef Goebbels. Somehow, there was an evil manifestation sitting next to me and planning all sorts of dire happenings to the existing good causes. My right hon. Friend is a perfectly sweet, decent honourable gent who does not have a vicious thought in his mind. The House should trust him.
The Liberal Democrat new clause 4 gives us a chance to explain our approach to the reallocation of the millennium stream, which seems to have worried people.

Mr. Brooke: I greatly enjoyed the Minister's reference to his right hon. Friend. In his capacity as Chairman of the Select Committee on National Heritage, the right hon. Member for Manchester, Gorton (Mr. Kaufman) once said to me, "Of course I trust you Secretary of State: it is the ones who come after you about whom I am worried."

Mr. Banks: I do not know anything about impending reshuffles. There has been one in the Opposition and we constantly read about them in the Government. Whoever is Secretary of State—and I know that it will be the present incumbent for many years—can be accorded the same trust as my right hon. Friend. Why should we want


to destroy the existing good causes? It offends me somewhat that Opposition Members should feel that we have ulterior motives—that we are somehow intent on destroying the existing good causes and the national lottery. On Sunday, the front page of The Observer stated that the Chancellor of the Exchequer had squirrelled away £50 billion. That is a great deal to squirrel away, but I think that we can rely on our Chancellor to manage the economy in good order and to make sure that there are sufficient funds for our spending priorities.
The right hon. Member for Caithness, Sutherland and Easter Ross (Mr. Maclennan) apologised to me for the fact that he would not be here for the winding-up speeches. I thank him for that and for his short speech. I assure him that when the time comes for us to decide how to reallocate the millennium share, we shall carefully consider what the lottery distribution bodies have achieved and the case for giving each a higher share. There is no assumption that it should go to the new opportunities fund. If that happens, it will be because we have concluded, after looking at all the good causes, that it is the right thing to do. We shall obviously take account of the representations by hon. Members and others on the merits of each good cause and, to address one of the issues in the amendments, we shall explain the basis on which we have decided the allocation.
When deciding what to do with the millennium share, we must try to ensure that each body has the potential to achieve at least as much as it has already achieved. We have adequate arrangements in place to ensure that we can evaluate the effectiveness and performance of each body. As the right hon. Gentleman will know from his membership of the Public Accounts Committee, the Department is accountable to Parliament for the effective use of national lottery distribution funds. As part of its normal sponsorship activities for the lottery overall and for individual distributing bodies, the Department is continually engaged in reviewing the performance of those distributing bodies. We will look very carefully at what has been done by each of the bodies and what can be achieved in future. That is the way in which we shall assess the performance of those lottery bodies, but, before reaching any final decision, we shall, of course, listen to what the lottery distributors and others have to say about the case for increasing the share of each good cause.
The hon. Member for West Suffolk (Mr. Spring) effectively said that the Bill goes beyond the manifesto. The manifesto, covering as it did the whole range of Government's responsibilities, dealt with the lottery only briefly. We did publish, as he acknowledged, during the election campaign a policy document, "The People's Money", which set out in more detail our plans for widening the benefits of the lottery. It fleshed out our plans for the new good cause and made it clear that the lottery's success enabled the new good cause to be established while the millennium stream was still continuing. Who could object to that? If having such a new good cause is a good idea, why not do so as soon as it can be afforded without damaging the other good causes?
"The People's Money" received wide and favourable media coverage, and we all know the result of the election that followed a week after its publication. The ideas in "The People's Money" are, in all essentials, the same as those that were put forward in our White Paper last July, which nine out of 10 respondents supported. I fail to see why it is not perfectly legitimate for us to base the Bill

on ideas that we put forward so clearly before the election and which were so comprehensively endorsed by the British people.
The hon. Member for West Suffolk is completely wrong to imply that there is some fundamental difference between the new good cause and the existing good causes. Is he saying that arts, sport and heritage are not core Government responsibilities? That may be his view, but it is certainly not mine.
I turn to the matter of damaging existing good causes, which was raised by the hon. Members for Ashford (Mr. Green) and for West Suffolk. The Opposition have returned to the most tired argument that has been used throughout the passage of the Bill—that we are taking money away from the existing good causes. That is simply not true. The Bill reduces the percentages that the arts, sport, heritage and charities will receive, but the greater than expected success of the lottery means that those are smaller percentages of a bigger total—in terms of hard cash, which is surely what matters to everyone, particularly the lottery distributing bodies, the existing good causes will receive £1.8 billion each during the current licence period, exactly the same as was forecast when the lottery started.
The other point that was made was that the good causes were counting on the extra income. The Opposition, when in power, never guaranteed that there would be no changes in the good cause percentage. They must have envisaged the possibility because they included in the 1993 Act provision to change the percentages by order. They never made it clear how they might use that power.

Mr. Brooke: rose—

Mr. Banks: I will give way to the right hon. Gentleman, who knows a great deal about the 1993 Act. He can explain why no guarantee was given in that Act that there would be no changes in the good cause percentages, and why a 5 per cent. minimum was put in. That meant effectively that, for the five good causes, the amount could have been reduced to 5 per cent. and that could have been done by order in the House, if the present Opposition had been in government. Seventy-five per cent. could have gone somewhere else. We are giving far more of a guarantee to the existing good causes than the previous Government ever gave during their period in office.

Mr. Brooke: I was seeking to intervene to make a point that flows out of the exchange between us. Given that the original intention was that we should ideally have a debate in each Parliament, with the ability to change the percentages by order thereafter, having listened to the opinions of the House, would the Minister, when the time comes, be prepared to recommend to the business managers the possibility of having just such a debate at that stage, so that the House can contribute to the discussion of the allocation?

Mr. Banks: The chief business manager—my right hon. Friend the Chief Whip—is sitting next to me whispering sweet nothings in my ear. I am sure that he heard what the right hon. Gentleman said and will be seized of the good sense of his suggestion.
Let me finish on the commitment to the existing good causes. This is very important and it is where the trust element must come in. Time and again throughout the passage of the Bill, here and in another place, the Secretary of State, my hon. Friend the Minister for Arts and my noble Friend the Deputy Chief Whip in the other place have made our position on future changes on allocations abundantly clear and I am happy to repeat them.
First, barring the extremely unlikely circumstances in which lottery income for good causes is less than £10 billion in total, we will ensure that each of the existing good causes receives by 2001, when the present licence expires, the £1.8 billion expected at the time that the lottery started. Secondly, the Government have taken no decision on how any returns beyond £10 billion might be allocated—there is no assumption that they automatically fall to the new good cause or any other. Thirdly, the Government have no plans beyond those that they have announced already—the reduction in the millennium share to 13 per cent. and the increase in the new good cause to 20 per cent. in autumn 1999—to alter the funding of the existing good causes. That applies both to 2001 and beyond. That is fairly clear; one cannot be more explicit about that.
There is no way that the Department for Culture, Media and Sport is setting out to ensure that culture and sport do not receive money beyond 2001. I cannot make it any clearer than that and I hope that the hon. Member for West Suffolk will accept that point. I reject both the amendments.

Mr. Spring: With the leave of the House. The reassurances that the Minister has sought to give are wholly unsatisfactory because, as he knows, the new opportunities fund is a creation which involves a massive centralisation of power in the hands of a Secretary of State, which makes this completely different from the other good causes. Therefore, to protect the good causes, we seek to ensure that the minima are changed. As Lord McIntosh accepted, this is a radically different situation. Therefore, we will concentrate on amendment No. 1 to put down a clear marker to those who are concerned—the recipients of the lottery and those in the distributing bodies. We want to ensure as best we can that the smash-and-grab raid on the lottery does not continue and worsen.

Question put and negatived.

Clause 6

THE NEW GOOD CAUSE AND THE RE-ALLOCATION OF LOTTERY MONEY

Amendment proposed:  No. 1, in page 7, line 43, at end inser—
'(6A) In section 28 of the 1993 Act (power to amend section 22) in subsection (2)(a) for "5 per cent." There shall be substituted "13 ⅓per cent".'.—[Mr Peter Ainsworth.]

Question put, That the amendment be made:—

The House divided: Ayes 120, Noes 277.

Division No. 288]
[8.48 pm


AYES


Ainsworth, Peter (E Surrey)
Lloyd, Rt Hon Sir Peter (Fareham)


Atkinson, David (Bour'mth E)
Luff, Peter


Atkinson, Peter (Hexham)
Lyell, Rt Hon Sir Nicholas


Bercow, John
MacGregor, Rt Hon John


Beresford, Sir Paul
McIntosh, Miss Anne


Body, Sir Richard
MacKay, Andrew


Boswell, Tim
Maclean, Rt Hon David


Bottomley, Peter (Worthing W)
McLoughlin, Patrick


Bottomley, Rt Hon Mrs Virginia
Madel, Sir David


Brady, Graham
Major, Rt Hon John


Brooke, Rt Hon Peter
Malins, Humfrey


Browning, Mrs Angela
Maples, John


Bruce, Ian (S Dorset)
Mates, Michael


Burns, Simon
Maude, Rt Hon Francis


Butterfill, John
May, Mrs Theresa


Chapman, Sir Sydney
Moss, Malcolm


(Chipping Barnet)
Nicholls, Patrick


Clappison, James
Page, Richard


Clifton-Brown, Geoffrey
Paice, James


Collins, Tim
Paterson, Owen


Colvin, Michael
Pickles, Eric


Cormack, Sir Patrick
Prior, David


Cran, James
Redwood, Rt Hon John


Davies, Quentin (Grantham)
Robathan, Andrew


Davis, Rt Hon David (Haltemprice)
Robertson, Laurence (Tewk'b'ry)


Dorrell, Rt Hon Stephen
Roe, Mrs Marion (Broxbourne)


Duncan, Alan
Ruffley, David


Duncan Smith, Iain
St Aubyn, Nick


Faber, David
Sayeed, Jonathan


Fabricant, Michael
Shephard, Rt Hon Mrs Gillian


Flight, Howard
Shepherd, Richard


Forth, Rt Hon Eric
Simpson, Keith (Mid-Norfolk)


Fowler, Rt Hon Sir Norman
Spelman, Mrs Caroline


Fox, Dr Liam
Spicer, Sir Michael


Fraser, Christopher
Spring, Richard


Garnier, Edward
Stanley, Rt Hon Sir John


Gibb, Nick
Steen, Anthony


Gillan, Mrs Cheryl
Streeter, Gary


Gray, James
Swayne, Desmond


Green, Damian
Syms, Robert


Greenway, John
Tapsell, Sir Peter


Grieve, Dominic
Taylor, Ian (Esher & Walton)


Gummer, Rt Hon John
Taylor, Sir Teddy


Hague, Rt Hon William
Townend, John


Hamilton, Rt Hon Sir Archie
Tredinnick, David


Hammond, Philip
Trend, Michael


Hayes, John
Tyrie, Andrew


Heald, Oliver
Viggers, Peter


Heathcoat-Amory, Rt Hon David
Walter, Robert


Hogg, Rt Hon Douglas
Wardle, Charles


Hunter, Andrew
Whittingdale, John


Jack, Rt Hon Michael
Widdeoombe, Rt Hon Miss Ann


Jackson, Robert (Wantage)
Wilkinson, John


Jenkin, Bernard
Willetts, David


Johnson Smith,
Wilshire, David


Rt Hon Sir Geoffrey
Winterton, Mrs Ann (Congleton)


Kirkbride, Miss Julie
Winterton, Nicholas (Macclesfield)


Laing, Mrs Eleanor
Woodward, Shaun


Lait, Mrs Jacqui
Yeo, Tim


Lansley, Andrew



Letwin, Oliver
Tellers for the Ayes:


Lewis, Dr Julian (New Forest E)
Mr. John M. Taylor and


Lidington, David
Mr. Stephen Day.




NOES


Adams, Mrs Irene (Paisley N)
Barnes, Harry


Ainsworth, Robert (Cov'try NE)
Bayley, Hugh


Allen, Graham
Beard, Nigel


Anderson, Donald (Swansea E)
Bennett, Andrew F


Anderson, Janet (Rossendale)
Berry, Roger


Ashton, Joe
Best, Harold


Austin, John
Betts, Clive


Banks, Tony
Blears, Ms Hazel






Blizzard, Bob
Griffiths, Jane (Reading E)


Boateng, Paul
Griffiths, Nigel (Edinburgh S)


Bradley, Keith (Withington)
Grogan, John


Bradley, Peter (The Wrekin)
Gunnell, John


Bradshaw, Ben
Hain, Peter


Brinton, Mrs Helen
Hall, Mike (Weaver Vale)


Brown, Rt Hon Nick (Newcastle E)
Hall, Patrick (Bedford)


Brown, Russell (Dumfries)
Hamilton, Fabian (Leeds NE)


Browne, Desmond
Hanson, David


Buck, Ms Karen
Heal, Mrs Sylvia


Burden, Richard
Henderson, Ivan (Harwich)


Burgon, Colin
Hepburn, Stephen


Caborn, Richard
Heppell, John


Campbell, Alan (Tynemouth)
Hewitt, Ms Patricia


Campbell, Mrs Anne (C'bridge)
Hill, Keith


Campbell-Savours, Dale
Hinchliffe, David


Canavan, Dennis
Hoon, Geoffrey


Caplin, Ivor
Hope, Phil


Casale, Roger
Hopkins, Kelvin


Chapman, Ben (Wirral S)
Howarth, Alan (Newport E)


Chisholm, Malcolm
Howells, Dr Kim


Clapham, Michael
Hoyle, Lindsay


Clark, Rt Hon Dr David (S Shields)
Hughes, Ms Beverley (Stretford)


Clark, Dr Lynda
Hughes, Kevin (Doncaster N)


(Edinburgh Pentlands)
Humble, Mrs Joan


Clark, Paul (Gillingham)
Hutton, John


Clarke, Rt Hon Tom (Coatbridge)
Iddon, Dr Brian


Clarke, Tony (Northampton S)
Jackson, Ms Glenda (Hampstead)


Clelland, David
Jackson, Helen (Hillsborough)


Clwyd, Ann
Jenkins, Brian


Coaker, Vernon
Johnson, Miss Melanie


Coffey, Ms Ann
(Welwyn Hatfield)


Connarty, Michael
Jones, Barry (Alyn & Deeside)


Cooper, Yvette
Jones, Mrs Fiona (Newark)


Cranston, Ross
Jones, Helen (Warrington N)


Crausby, David
Jones, Ms Jenny


Cryer, Mrs Ann (Keighley)
(Wolverh'ton SW)


Cummings, John
Jones, Jon Owen (Cardiff C)


Cunliffe, Lawrence
Jones, Dr Lynne (Selly Oak)


Cunningham, Rt Hon Dr John
Jones, Martyn (Clwyd S)


(Copeland)
Keeble, Ms Sally


Cunningham, Jim (Cov'try S)
Keen, Alan (Feltham & Heston)


Darling, Rt Hon Alistair
Kennedy, Jane (Wavertree)


Darvill, Keith
Khabra, Piara S


Davey, Valerie (Bristol W)
Kidney, David


Davidson, Ian
Kilfoyle, Peter


Davies, Rt Hon Denzil (Llanelli)
King, Andy (Rugby & Kenilworth)


Davis, Terry (B'ham Hodge H)
Kingham, Ms Tess


Dawson, Hilton
Ladyman, Dr Stephen


Dean, Mrs Janet
Lawrence, Ms Jackie


Denham, John
Laxton, Bob


Dismore, Andrew
Lepper, David


Dobbin, Jim
Leslie, Christopher


Dobson, Rt Hon Frank
Levitt, Tom


Donohoe, Brian H
Lewis, Ivan (Bury S)


Drew, David
Lewis, Terry (Worsley)


Eagle, Angela (Wallasey)
Liddell, Mrs Helen


Eagle, Maria (L'pool Garston)
Linton, Martin


Edwards, Huw
Livingstone, Ken


Efford, Clive
Lock, David


Ellman, Mrs Louise
Love, Andrew


Ennis, Jeff
McAllion, John


Fisher, Mark
McAvoy, Thomas


Fitzsimons, Lorna
McCabe, Steve


Flint, Caroline
McCafferty, Ms Chris


Flynn, Paul
McCartney, Ian (Makerfield)


Foster, Rt Hon Derek
McDonnell, John


Foster, Michael Jabez (Hastings)
McFall, John


Foster, Michael J (Worcester)
McIsaac, Shona


Gapes, Mike
McKenna, Mrs Rosemary


Gardiner, Barry
McNamara, Kevin


Gilroy, Mrs Linda
McNulty, Tony


Godsiff, Roger
Mactaggart, Fiona


Goggins, Paul
McWalter, Tony


Golding, Mrs Llin
Mahon, Mrs Alice


Gordon, Mrs Eileen
Marsden, Gordon (Blackpool S)





Marshall, David (Shettleston)
Sedgemore, Brian


Marshall, Jim (Leicester S)
Sheerman, Barry


Marshall-Andrews, Robert
Sheldon, Rt Hon Robert


Martlew, Eric
Simpson, Alan (Nottingham S)


Maxton, John
Singh, Marsha


Meale, Alan
Skinner, Dennis


Michael, Alun
Smith, Rt Hon Chris (Islington S)


Michie, Bill (Shef'ld Heeley)
Smith, Miss Geraldine


Milburn, Alan
(Morecambe & Lunesdale)


Miller, Andrew
Smith, Llew (Blaenau Gwent)


Mitchell, Austin
Soley, Clive


Moffatt, Laura
Southworth, Ms Helen


Moonie, Dr Lewis
Spellar, John


Moran, Ms Margaret
Squire, Ms Rachel


Morgan, Ms Julie (Cardiff N)
Starkey, Dr Phyllis


Morgan, Rhodri (Cardiff W)
Steinberg, Gerry


Motley, Elliot
Stevenson, George


Morris, Ms Estelle (B'ham Yardley)
Stewart, David (Inverness E)


Morris, Rt Hon John (Aberavon)
Stewart, Ian (Eccles)


Mudie, George
Stinchcombe, Paul


Mullin, Chris
Stoate, Dr Howard


Murphy, Jim (Eastwood)
Stringer, Graham


Norris, Dan
Stuart, Ms Gisela


O'Brien, Bill (Normanton)
Sutcliffe, Gerry


O'Brien, Mike (N Warks)
Taylor, Rt Hon Mrs Ann


O'Hara, Eddie
(Dewsbury)


Olner, Bill
Taylor, David (NW Leics)


O'Neill, Martin
Thomas, Gareth (Clwyd W)


Osborne, Ms Sandra
Thomas, Gareth R (Harrow W)


Palmer, Dr Nick
Tipping, Paddy


Pearson, Ian
Todd, Mark


Pendry, Tom
Touhig, Don


Pickthall, Colin
Trickett, Jon


Pike, Peter L
Truswell, Paul


Plaskitt, James
Turner, Dennis (Wolverh'ton SE)


Pollard, Kerry
Turner, Dr George (NW Norfolk)


Pond, Chris
Vaz, Keith


Pope, Greg
Vis, Dr Rudi


Prentice, Ms Bridget (Lewisham E)
Walley, Ms Joan


Prentice, Gordon (Pendle)
Ward, Ms Claire


Prescott, Rt Hon John
Wareing, Robert N


Primarolo, Dawn
Watts, David


Prosser, Gwyn
White, Brian


Purchase, Ken
Williams, Rt Hon Alan (Swansea W)


Quin, Ms Joyce



Quinn, Lawrie
Williams, Alan W (E Carmarthen)


Rammell, Bill
Williams, Mrs Betty (Conwy)


Rapson, Syd
Wills, Michael


Raynsford, Nick
Winnick, David


Reed, Andrew (Loughborough)
Winterton, Ms Rosie (Doncaster C)


Reid, Dr John (Hamilton N)
Wise, Audrey


Roche, Mrs Barbara
Wood, Mike


Rogers, Allan
Woolas, Phil


Rooker, Jeff
Wright, Anthony D (Gt Yarmouth)


Ross, Ernie (Dundee W)
Wright, Dr Tony (Cannock)


Rowlands, Ted
Wyatt, Derek


Roy, Frank



Russell, Ms Christine (Chester)
Tellers for the Noes:


Salter, Martin
Mr. David Jamieson and


Sawford, Phil
Mr. Jim Dowd.

Question accordingly negativd.

Clause 17

OBJECTS

9 pm

Mr. Spring: I beg to move amemdment No. 5, in page 17, line 36, out from 'potential' to 'and' in line 40.

Mr. Deputy Speaker: With this, it will be convenient to discuss amendment No. 6, in clause 27, page 22, leave out lines 8 and 9.

Mr. Spring: In the course of the past few days, I have read the Secretary of State's book "Creative Britain".


In it, he describes the huge increase in our exports of radio and television material, the increase in employment in that area and the massive rise in sponsorship of the arts and in the number of cinema admissions. On behalf of my hon. Friends, I thank the right hon. Gentleman for so generously applauding the Conservative Government's 18 years in office. It was precisely the conditions created by that Government which led to the explosive increases so graphically set out in his 27-page introduction.
As we have made clear in respect of the National Endowment for Science, Technology and the Arts—NESTA—we are not against the setting up of a national fund for talent; there is considerable merit in the idea. Indeed, it is based on a Conservative concept. It builds on the well-established and admirable philanthropic tradition of this country. We entirely support the principle of a fund that supports individual talent.
We are fortunate in having many people of considerable talent who have contributed to our national life and won so many Nobel prizes. Our success compares extremely favourably with that of any other country, especially given our small population.
The sad truth, however, is that the Government have missed an important opportunity. Elements involved in the establishment of NESTA in the form suggested in the Bill put at risk the success of the whole venture. We greatly regret the fact that the Government have chosen to establish it in this form. I appeal to the Minister even at this late stage to persuade the Government that NESTA' s objectives are incompatible with the sort of body that we believe could successfully nurture our national talent. We are deeply sceptical of the idea of setting up a quasi-governmental body, some of whose objectives will be overtly commercial.
We know now why the Government have determined not to set up NESTA as an independent charity, despite the clear commitment given before the election to do so. As the Minister explained, the Government have decided to graft a commercial remit on to the original concept for NESTA, which, by definition, loses it the advantages of charitable status. The amendments are designed to remove the commercial elements and turn NESTA into the genuine trust for talent that the entire country would applaud. To set up a national endowment with true nobility of purpose would secure the support not only of the House, across party political lines, but of the whole country, desirous of enabling talented individuals to realise their talents to the full.
We accept the advantages of establishing a body such as NESTA as an independent endowment, but, regrettably, NESTA, as proposed, will not be fully independent of the Government. As a consequence, it risks not being able to attract money from independent sources, which is a crucial element in the long-term success of NESTA. That is the crux of our concern about the establishment of that body.
As I said on Second Reading, people simply do not quickly volunteer to give money to Government bodies—even Bernie Ecclestone, I dare say, might find it difficult to be so persuaded.
I remind the House of the Labour party's commitment to NESTA:
Our immediate objective would be to have NESTA-supported ideas earning copyright revenues by 2001. The National Endowment for Science, Technology and the Arts would be a national trust for talent, helping to turn bright ideas into successful and innovative businesses. It will be constituted as an independent charity.
I stress those last few words. Labour continued:
NESTA will invite successful figures in the arts, technology and science to contribute part of the value of their copyrights and patents to help the young talent of tomorrow. These contributions will go into a permanent endowment fund. To give NESTA an initial boost, limited contributions will be set aside from the new Lottery fund to add to this endowment".
That commitment is to be found in the Labour party document of 23 April 1997.
The Prime Minister reiterated those proposals before the election. In a press release on 27 April, he said:
We propose to give a Lottery-aided launch to our proposal for a national talent fund—a National Endowment for Science, Technology and the Arts. NESTA will be an independent charity which will encourage successful people in the arts and sciences to donate part of the proceeds of their talent to an endowment fund which will foster new talent for the future".
Those words are to be applauded.
The amendments would remove the commercial aspect of the objectives set out for NESTA. They would give it a proper coherence and a real opportunity to acquire the national support that it deserves. In effect, they would make it work. There is a danger that the initial endowment of £200 million will be put at risk because NESTA, as currently constituted, will not attract the additional funding over time.
As I said in Committee, we broadly support the aims of NESTA and would support the idea of just such an independent body dedicated to nurturing talent, especially in the arts. Indeed, the Conservative manifesto of 1997 included the following pledge:
We will encourage the use of Lottery money to train young athletes and artists, with revenue funding for bursaries, concessionary tickets to professional performances and support for young people's organisations and productions.
Therefore, there was considerable cross-party support, which the Government have unfortunately now put at risk.
NESTA was in fact the development of an initiative first announced in April 1996 by my right hon. Friend the Member for South-West Surrey (Mrs. Bottomley), to whom I pay tribute.
It was always the view of the Conservative party that the lottery would evolve. That view was reinforced as the popularity of the lottery grew among those playing it and the communities that benefited from lottery grants. As my right hon. Friend the Member for Huntingdon (Mr. Major) said on Second Reading:
there is the prospect of moving rather more from capital funding to revenue funding, which was always envisaged at the outset and, again, is perfectly sensible. The only points at issue are the specific details of what is proposed and the timing."—[Official Report, 7 April 1998; Vol. 310, c. 187.]
I am happy to congratulate the Government on following the path set by the previous Administration, but they are risking the very success and popularity of the lottery by using it to fund areas that it was not originally set up to finance. Potentially, that could damage the image of the lottery and could end in failure.
In Committee, we learned of the Government's continuing determination to use the lottery to supplement public expenditure on health, education and the environment—I use those definitions in the broadest possible terms. The amendments simply highlight another unexpected and unwelcome departure in lottery funding under Labour.
We debated in Committee the unfortunate decision—which I believe will be regretted—to place NESTA under the control of the Secretary of State rather than to make it a genuinely independent body, as was at least the Government's original stated intention. We debated the disturbing funding arrangements for NESTA, which show that the Government have no faith that it will ever perform as an independent, self-financing body or that it will ever manage to attract significant contributions from independent sources. The evidence, as we shall see, is the scope for the Government to raid the original good causes to pay for NESTA.
We are also concerned about the requirement placed on NESTA not merely to encourage talented individuals in the fields of science, technology and the arts and to contribute to public knowledge and appreciation, but to seek out and sponsor commercial success in those sectors. It is simply the latest incarnation of Labour's long-standing desire to pick winners, as the previous Labour Government sought to do so unsuccessfully. It is a further sign of Labour's inexhaustible faith in Government rather than the private sector.
As we look back on the development of the venture capital industry in Britain, we must recognise that, although we have had many successes, more could be done. There is certainly an argument that many of the most important British inventions have been commercially exploited elsewhere. However, we recognised that when we were in government, in the considerable changes to the tax regime for venture capital. We sought to encourage and secure seedcorn capital, by the tax changes introduced by my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke). That is the way forward. If the dynamics of the small business sector, particularly the seedcorn, are to be nurtured and encouraged, it is through the tax mechanism and not by the Government picking winners. We have been there before, and I believe that once again it will be a considerable failure.
A similar amendment was proposed and rejected in another place, when my noble Friend Lord Skidelsky said:
The contention seems to be that we are very good at inventions but banks or others are reluctant to back them, so they end up being exploited overseas. The argument that our innovators have suffered from lack of venture capital is an old one, but it is very hard to prove. Surely, whatever the case, NESTA should not seek to become a venture capitalist or business angel in its own right. We should have learned by now that government agencies should not try to second guess the private sector. In the end it is the taxpayer, or in this case other National Lottery initiatives, who suffers the losses of bad decisions."—[Official Report, House of Lords, Grand Committee, 29 January 1998; Vol. 585, c. 108.]
The difficulty about establishing that objective for NESTA is that in practice it may well embody the very worst kind of corporatist second-guessing. It is an ominous precedent which I wish to highlight again.
By adding that specific aim to NESTA's remit, the Government are establishing a further call on the lottery in an area that should be the responsibility of the

Department of Trade and Industry—if the Government have any role, other than via the clear tax incentives that my right hon. and learned Friend the Member for Rushcliffe introduced in the latter years of the previous Government. The Minister should reflect on that. If it is necessary or desirable to amend the tax regime, something should be worked out between the Treasury and the Department of Trade and Industry that would satisfy the integrity of NESTA. We should be happy to support such a policy, which would be separate from the commercial remit being given to NESTA.
9.15 pm
The conventional new Labour wisdom is that the British economy is blighted by short-termism that prevents the British people from fulfilling our true potential; that we do not have a sufficiently vigorous or flexible enterprise culture to take advantage of all our talent for innovation. It was clear from the comments of Labour Members in Committee that the private sector was an alien and mysterious world to them, because so few had any practical experience of it.
The aim of the clause is return to the state-sponsored enterprise for which there is no evidence of success in this country over a long period. If a market for an idea or project cannot be found in the private sector, it is folly for the Government to imagine that they know better. It is regrettable that the Government have chosen to saddle NESTA with that objective. We urgently ask them to reconsider, even at this late stage. If they were prepared to do so, we should happily support the establishment of NESTA.
We discussed all the issues comprehensively in Committee, but the Government rejected outright any amendment that we proposed. At no stage did they even consider looking again on Report at any of the points that we had raised. That is unprecedented in the experience of many and shows the insecurity of Ministers. How much better it would be if NESTA were set up as a charitable trust—as the Government originally intended—along the lines of the National Trust, which was established by a series of Acts of Parliament and commands the support of millions throughout the country, or the Prince's Trust, which makes grants to businesses, but does not take on commercial risks. The Government are proposing a beast that is neither fish nor fowl. It is not charitable in its aims, so it cannot benefit from charitable status and will not attract the general public support that a charity enjoys, but it will not make any money either. Instead of attempting to be a venture capital arm of the Government, NESTA should act as a real endowment for talented individuals.
Governments have a miserable record of picking winners in this country. There is no reason to suppose that that will change. I ask the Minister once again to consider the great potential that NESTA has. A clear message of bipartisan support could be sent out from the House. Creating a widely appreciated national endowment for talent is within the Minister's gift, but he must accept that the commercial element contains the seeds of NESTA's destruction and its lack of public acceptance.
I hope that the Minister will reflect on what I have said today and what my hon. Friends said so often in Committee. He should return to the assurances given when the Prime Minister, then Leader of the Opposition, set out the original concept. If the Government returned


NESTA to what was originally envisaged, even at this late stage, real hope would be offered to those talented and successful individuals who would enjoy the benefits of the endowment from the national lottery that NESTA offers.

Mr. Tom Pendry: I had intended to make a lengthy speech on Third Reading, but as my hon. Friends on the Front Bench have been so forthright and clear in their answers on Report, I am left with just one narrow point that relates to amendment No. 5. It follows a point that I made on Second Reading which does not appear to have been acted on in Committee. My hon. Friend the Member for Eastwood (Mr. Murphy) made a similar point. It relates to NESTA and our promise—which I wrote—in the sports election manifesto. Page 10 of that document states:
The endowment will not focus solely on excellence. It will be inclusive in its approach, encouraging access and partnership across the whole range of sciences, humanities, sports and the arts.
On Second Reading, I suggested that the Government might see a way in which to develop a useful sporting role for NESTA in, for instance, sports science or sports information technology—both of which are crucial to developing world-class sport in the UK. Unfortunately, the Government seemed unable to move on that point in Committee. They appeared reluctant even to acknowledge the omission. I am sure that it was merely an omission and that the Minister for Arts was right at the time. Perhaps he is saving his best card until tonight, and will give sport—and me—some encouragement in the concept of NESTA at this very late stage. I congratulate my right hon. and hon. Friends on the Front Bench on their handling of the Bill.

Mr. Andrew Lansley: I am grateful for the opportunity briefly to add to the excellent remarks of my hon. Friend the Member for West Suffolk (Mr. Spring) in pursuit of acceptance of amendments Nos. 5 and 6. I want to add to his remarks, not least because his reference to the Labour party's desire to pick winners struck a great chord.
When I entered the civil service way back in 1979, one of our tasks in what was then called the industrial planning division—it seems a rather archaic title now—was to start to dismantle some of the measures that the previous Government had implemented precisely to pick winners. The National Enterprise Board, which was very like what the Labour party proposes, went about the task of trying to put public money into industrial and commercial enterprises with the objective of making money for the country and the taxpayer. Of course, it failed to do either.
I say that as somebody who was once responsible for the science and technology budget in the Department of Trade and Industry. I disposed of £440 million. I shall elaborate briefly on the interesting debate on which my hon. Friend the Member for West Suffolk briefly touched. He criticised the Labour party's desire to move towards the market in proposing that NESTA should provide resources, take stakes in companies and acquire property to pursue commercial exploitation of an invention, new product or process.
In moving towards the marketplace, one must realise that one is not behaving in the same way as one would in a genuine market. There is a conjunction of two

principles—one of exploitation close to the marketplace and one of additionality. I found when working on the science and technology budget that, when one moves public money for the purposes of subsidy closer to the marketplace and at the same time applies the principle of additionality—I shall be interested to hear whether the Minister says that that is not to be applied in this context, although I suspect that it will be—one ends up with projects right at the margin of commercial exploitation. The market itself is quick to leap on those products, processes and inventions that have readily exploitable commercial potential. It leaves to the publicly funded or publicly subsidised body those projects that are not obviously commercial or will not obtain a full return. The net result is that the market says that the publicly funded operator can have all the projects that are right at the margins where the returns are doubtful.
To reinforce what my hon. Friend the Member for West Suffolk was saying, Ministers should not be sanguine about the possibility of the project bringing forward returns to the taxpayer or NESTA for subsequent reinvestment. On the contrary, my hon. Friend was right to emphasise the value of the endowment in relation to talented individuals. That is precisely where the public sector—at some distance from the marketplace—does not necessarily exploit the potential.
I hope that we have learnt not to seek to direct subsidy close to the marketplace in substitution for commercial judgments. I hope that we have learnt that there is a role for the public sector through the subsidy of research that is essentially some distance from the marketplace. There are significant externalities to the United Kingdom economy from subsidising that research because not all the benefits of that research can be appropriated to a particular project or the promoter. That is why the public sector puts funding and subsidy into projects further from the marketplace.
Interestingly, there are precisely the same potential externalities available if one subsidises individuals who have talent—and I say that with a constituency interest. It is highly probable that many individuals in the area around Cambridge are precisely those who have the talent to bring their projects, products, processes and inventions to the marketplace. What they do not lack is the commercial exploitation around Cambridge. What is important to them is the process of bringing them out of some of the world-class research institutes in Cambridge university and giving them a start.
That start will often be focused on their talents as individuals, demonstrated in the research environment. It will not necessarily be in relation to a particular project, but it will be in relation to their broader talent. In just the same way as public subsidy should be directed towards blue-skies research, the endowment should be directed toward people who can look to the blue skies but who are not necessarily close to the marketplace. On that basis, I support the new clause.

Mr. Prior: I wish to make two points in support of my hon. Friend the Member for West Suffolk (Mr. Spring). First, NESTA is mixing its drinks—mixing thoroughly laudable charitable aims and commercial aims. The great risk is that the almost inevitable failure of its commercial objectives will ultimately overwhelm its sensible charitable ones. I entirely agree with my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) that


the history of Government organisations in terms of picking winners is a bad one. When they pick losers, it casts a shadow over the worthwhile charitable objectives.
I am glad to see the Minister for Small Firms, Trade and Industry in the Chamber, as I wish to refer to the myth that there is a shortage of capital in the United Kingdom for decent ventures. I agree with my hon. Friend the Member for South Cambridgeshire that, at an early stage, potential entrepreneurs, scientists and artists need help, encouragement, training and education. However, a lot of capital is available in the commercial market and, in Cambridge, there are venture capital groups that specialise in science and high-tech firms. I ask the Government not to delude themselves into thinking that there is a shortage of capital.

Mr. Fisher: I am glad that there is a measure of agreement that NESTA is fundamentally a good idea and that the United Kingdom is good at invention, design, engineering, science and medical and artistic innovation. Despite one or two comments from Opposition Members, I think that there is also general agreement that we are not so good at developing ideas in the private sector or at developing ideas and bringing them to the market.
In framing NESTA, the Government have been guided by three important reports: the 1997 Confederation of British Industry report "Breaking the Growth Barriers for Technology-Based Small and Medium Sized Enterprises"—a snappily named document—which identified the need for early-stage finance and seedcorn investment; the 1997 House of Lords Select Committee on Science and Technology report "The Innovation-Exploitation Barrier", which identified the need for management of innovation, highlighting the importance of intellectual property; and the 1996 Bank of England report "The Financing of Technology-Based Small Firms", which called for partnership between the public and private sectors.
All three reports identified a weakness, which is not to say that there is no good work. It was encouraging to hear from the hon. Member for South Cambridgeshire (Mr. Lansley) that there is, perhaps inevitably, a clustering in and around a great university such as Cambridge, which means that many good ideas will be produced and brought to market. However, Cambridge is perhaps better placed than some other areas to benefit from seedcorn investment; it will not be alone, but success there may not be reflected throughout the country. The belief that we are failing in some respects has led the Government—with, I think, the general support of the Opposition—to press forward with the idea that, good though we are at innovation, we are less good at developing ideas and bringing them to fruition; it will often be for the private sector to take on those ideas, products and services.
There is some confusion about what NESTA will do. It will not be a rerun of the Industrial Reorganisation Corporation—it will not be a Government company sponsoring new ideas. It will do specific things: it will provide limited seed capital; it will provide guidance on the protection of intellectual property rights; it will raise awareness among banks about technological entrepreneurship; it will support networks for creative individuals; and it will provide a one-stop source of

information. Those are practical ideas, which cluster around the problem—we do not intend that NESTA will replace the market.
In his short but helpful speech, my hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry) asked whether NESTA would also support sport. He will appreciate that the projects that NESTA backs will be a matter for its chairman and board, who will be appointed very soon. However, there is no reason why sports products and services should not be supported, particularly where new technologies can help to improve performances, training or the medical understanding of sport, for example—it is easy to see where there may be interesting and fruitful conjunctions between technology, innovation and sport. I am sure that my hon. Friend will work with those organisations that will present interesting new ideas to NESTA.
There is some confusion about whether NESTA will operate on the margins and whether it will duplicate the private sector. Although we appreciate that there are some dangers that it could do so, it is not our intention that it should. The hon. Member for North Norfolk (Mr. Prior) said that there was plenty of venture capital; I agree that there is plenty for some good ideas, but we should not ignore the 1995 report of the European Venture Capital Association, which identified the fact that, in that year, only £23 million was available for small and early-stage businesses, amounting to only 1 per cent. of the venture capital activity in this country. That suggests that there is not the scale of capital that there might be—which probably accounts for why we have been losing the benefit of the development of some of the innovations and techniques with which we have benefited other countries.
Labour Members consider this a good, constructive, practical idea, and we commend it to the House. We think that amendments Nos. 5 and 6 would knock out the core of the development of products and services, the importance of intellectual property and the economic realisation of what NESTA is intended to foster and nurture, and we therefore hope that the House will reject the amendments if they are pressed to a vote.

Mr. Spring: The Minister made a point about the possible lack of venture capital in this country. The subject is debatable and arguable, but let me make another point to him again.
The Minister fails to understand that if the Government indeed believe that there is a shortage of venture capital as seedcorn investment potential in this country, this is not the way to address the problem. It should be addressed by means of tax and other incentives. We should not put at risk an endowment, thereby depriving it of its charitable status. The Government are responsible for a total confusion of opportunities, which I very much regret. I cannot for the life of me understand why the Government are adopting such a means of dealing with a problem that they think exists.

Mr. Fisher: The hon. Gentleman is being unusually doctrinaire. We are not talking about alternatives. Of course there is room for the tax system and the private sector, which perform their task very well and will continue to do so. They are not alternatives: we need them both. We believe, however, that there are gaps and


weaknesses, and that our proposed system can work along with the existing tax incentives and seedcorn capital from the private sector and strengthen this important area.

Mr. Spring: I am afraid that that does not answer my point. The simple truth is that the system will not work. It has never worked in this form before, and it certainly will not work now.
The most important aim of the national endowment was to secure a charitable status. It was an endowment which all of us could have been happy to support. It is a great shame that the Government are so determined to affix this particular commercial remit to the whole concept of NESTA. The House could have sent out the clear message that NESTA has an important role to play, across party divisions, as a national endowment body. Adhering to the old-fashioned and long-past idea that Governments can pick winners and impose a commercial remit destroys the value of NESTA in its entirety.
I do not want to press the matter further, but we want to put on record our fear that NESTA—which has so much potential—is put at risk by the way in which it has been constructed in the Bill. I think it a great shame that the Government have moved away from their original commitments, which we would have been happy to support.

Amendment negatived.

Order for Third Reading read.

The Secretary of State for Culture, Media and Sport (Mr. Chris Smith): I beg to move, That the Bill be now read the Third time.
Let me first give a warm welcome to the hon. Member for East Surrey (Mr. Ainsworth) in his new capacity as shadow Secretary of State. In my dealings with him here over a number of years, I have always found his approach both courteous and constructive, and I look forward to fruitful and robust debate with him across the Floor of the House. He seemed to spend most of this afternoon and this evening reading my book. I recommend it to him as a somewhat more productive exercise than reading the fulminations of Mr. George Walden on the subject.
The Bill has been the subject of much interest both inside and outside the House. It has also been subject to thorough scrutiny by the House. I place on record my thanks to members of the Standing Committee and especially the hon. Member for North Thanet (Mr. Gale) and my hon. Friend the Member for Bootle (Mr. Benton) for their excellent chairmanship. The Committee was thorough in its scrutiny, and all the issues were debated thoroughly—indeed, so thoroughly that reading the proceedings of the Committee it seemed to me that the same speech was made on different occasions by several Committee Members. On some occasions, it appeared to be repeated several times within the same speech.
I must also thank my colleagues the Ministers for the Arts and for Sport for their sterling work both in Committee and on Report. Nor should I neglect to mention my noble Friend the Deputy Chief Whip in another place and my noble Friend Baroness Ramsay of Cartvale for their careful stewardship of the Bill in that place.
We have never sought to argue that the lottery as introduced by the right hon. Member for Huntingdon (Mr. Major) and his colleagues was anything other than a basically good idea. I appreciate the sincerity with which the right hon. Member for Horsham (Mr. Maude), the hon. Member for West Suffolk (Mr. Spring) and their colleagues sought in discussions on the Bill to preserve what they see as fundamental aspects of their vision of the lottery. My only regret is that we have not been able to persuade them that we agree with them on more than they realise and, where we disagree, we are improving on what is there already, not spoiling it.
I also thank the right hon. Member for Caithness, Sutherland and Easter Ross (Mr. Maclennan) and the hon. Member for Southport (Mr. Fearn) for their contributions from the Liberal Democrat Benches. I am grateful for their support on many issues and their intelligent probing on others.
Last, but definitely not least, I should thank all my colleagues on the Labour Benches who played a part in the discussions on Second Reading, in Committee and today. Their constructive and well-informed support, based on their knowledge of their constituents' needs, has been most welcome and has reminded us constantly of the rightness of what the Bill seeks to achieve.
The Bill delivers our clear commitments in our manifesto and pre-election documents to making something good even better. If the amendments agreed by the House find favour in another place, as I very much hope, this Bill will pass into law playing a significant part in achieving the four aims that we set out in our White Paper: first, widening the benefits of the lottery to health, education and in due course the environment; secondly, reforming the way in which lottery distribution works throughout all the existing good causes; thirdly, setting up the National Endowment for Science, Technology and the Arts; and, fourthly, securing confidence in the way in which the lottery is regulated and operated. In connection with the last of those aims, I am particularly grateful that the House has agreed to important amendments to set up a National Lottery Commission and to open up National Audit Office access to the operator.
The Bill is delivering our commitments, but it is only part of a wider picture. I ask the House to note, in particular, that today I am issuing new policy directions, under my existing powers, to the Arts Council of England, the English Sports Council, the National Lottery Charities Board and the National Heritage Memorial Fund.
On Second Reading, I told the House that I was starting consultations on those new directions and it is particularly pleasing that they have been strongly welcomed by the distributary bodies and that they are being issued in final form with very little change.
The new policy directions for existing distributors will, among other things, shift the focus away from big spending on bricks and buildings towards ensuring that more lottery money goes to people and activities. They will acknowledge the developmental needs of children and young people. They will remove the requirement for significant levels of partnership funding, which will make it easier for less wealthy organisations and areas to benefit. They will, for the first time, encourage distributors to consider how their strategies will contribute to sustainable development, and will invite them to consider the contribution that they can make through the


good causes to reducing economic and social deprivation. They will ensure that all regions and parts of society can benefit from the lottery.
I want everyone to have confidence that the money for good causes is allocated fairly and goes where it is needed. That is a central strand in our reform of the lottery, and our new directions will help us achieve it. I am particularly pleased that our proposals have been strongly welcomed by the bodies concerned. The Bill will help lottery distributors to be more strategic and proactive in their use of lottery money. We are streamlining the distribution system and helping applicants to cut through bureaucracy to make it easier for small community groups to find out about the lottery and receive grants. In many cases, decision making can be pushed closer to the grass roots.
Taken together, the Bill and the associated directions open an exciting new phase in the lottery's existence. I commend the Bill to the House.

Mr. Peter Ainsworth: I thank the Secretary of State for his kind words on my appointment. Our paths have crossed several times in recent years, and I hold the Secretary of State in considerable respect. One afternoon, I even had charge of his dog; we need not go into that now, but I can assure the House that the dog came to no harm.
It is a great honour for me to have slipped out of my stage management role of the past two years into playing a small speaking part at the end of deliberations on the Bill. I am well aware that the real stars were those who slogged through Committee. I pay tribute to them all, particularly to my hon. Friend the Member for West Suffolk (Mr. Spring) who guided the Opposition clearly and well. There were valiant contributions from my hon. Friends the Members for Mid-Dorset and North Poole (Mr. Fraser), for Ashford (Mr. Green), for Mid-Norfolk (Mr. Simpson) and for Eastbourne (Mr. Waterson). I pay tribute, too, to my immediate predecessor, my right hon. Friend the Member for Horsham (Mr. Maude), who brought his unique blend of elan and intelligence to his role in opposition. He is committed to listening to and speaking up for people whose lives are affected by the Secretary of State's Department.
I have considerable respect for the Secretary of State. It is a pity, therefore, that he has been crunched so early by pressure from the Chancellor of the Exchequer. On the back of his finely decorated book, there is a picture by Damian Green—[HON. MEMBERS: "Damien Hirst."] I mean Damien Hirst; I apologise to my hon. Friend the Member for Ashford (Mr. Green). The painting is titled, "Beautiful snail crunching under the boot painting", and it reminded me of the Secretary of State crunching under the boot of the Chancellor.
The previous Government set up and handed on the most successful lottery in the world. I hope that all hon. Members agree that that is some achievement, but we would never have claimed that the lottery was perfect. There are ways in which it can be improved. There are some welcome measures in the Bill. We have, for example, no fundamental objection to the clarification of the regulator's powers. We would support any sensible measure to improve the workings of the lottery, such as the introduction of better ways of handling smaller grants or removing bureaucratic impediments.
As my hon. Friend the Member for West Suffolk said, we support the principle of the creation of the National Endowment for Science, Technology and the Arts, but we do not support it as a quasi-venture capital outfit controlled by the Secretary of State. Conservative Members warned of the dangers of a Government trying to pick winners. In particular, we will continue to support measures that would increase the funds available to the arts, sport, heritage and charities. Our first objection to the Bill is that far from assisting those good causes, it damages them.
In answering that charge, the Government have sought to claim that the changes that they are making will benefit other good causes, such as out-of-hours activities in schools, health, the environment, science and technology. Those are indeed good causes, but that is not the point. If such causes are to be funded, they should be funded from central Government receipts, not by a raid on the arts, sport, heritage and charities.
The Government also tried to argue that the good causes will not suffer because the lottery is so successful that it is providing more money than originally expected. This is utterly bogus. The extra money may or may not be forthcoming. My hon. Friend the Member for West Suffolk mentioned lottery fatigue, which has occurred in other countries. I am glad that the Minister for Sport is not suffering from lottery fatigue and that his lust for the lottery remains unabated, even if the bills are getting onerous.
In any case, expectations have been built up by both the recipients and distributors of lottery proceeds. The Bill puts those expectations at risk. The distributing bodies know that and the Secretary of State knows it, too, as he acknowledges in his book. I have not read it all the way through, but I have read some of the reviews; it is a cruel world. He says:
the distributing bodies have adjusted their expectations upwards to reflect the success of the lottery.
The Bill is a semi-veiled attack on the arts, sports, charities and heritage. Unease about the Government's ability to deliver their pre-election nods and winks is turning into real concern and anger.
Our second objection to the Bill involves a fundamental breach of the principle of additionality. We have heard much about that today and throughout the course of the Bill. I was on the Standing Committee in 1993 that considered the Bill that introduced the national lottery. My two clearest memories are first, that if the Liberal Democrat spokesman had had his way, we would not have had a national lottery at all; and secondly, I recall the immense pressure brought to bear on the Committee, especially by the arts world and the sports world, to ensure that money from the lottery was safeguarded against any attempt by the Chancellor of the Exchequer to pilfer it to support central Government funding in other fields. Labour members of the Committee voiced their vociferous support for the principle of additionality.
The undertaking on additionality was given, and adhered to, by the previous Government. Despite the promises made by the Prime Minister and others at the general election, that undertaking has been broken by the Bill. Those lottery promises are due to join the mounting heaps of broken promises that the Government seem determined to leave behind.
Our third objection is that the Bill ignores the clearly established principle that lottery money should be distributed by bodies that operate at arm's length from the


Government. As the sorry story of the Bill has unfolded, it has become increasingly clear that the Government intend to use the new opportunities fund to divert money to its own favoured projects. The new opportunities fund and NESTA will be directly under ministerial control. We do not and cannot accept such a massive increase in political control over lottery players' money. The reason for that, once again, is contained in the Secretary of State's colourful book, although there is a sad lapse from his normal eloquence, so I shall torture the House only briefly with his grammar. He says:
In a very real way, lottery players think of lottery money as `their' funds far more determinedly than they do with taxation.
That is exactly the point—it may not be well expressed, but it is perfectly reasonable.
Finally, the original national lottery was based on an understanding that it would be used to support local initiatives by local people with local support. The Bill undermines the principle of local support by introducing an unwelcome and subversive centralisation of power. The distributing bodies will, for the first time, be given explicit powers to solicit bids for money, and who is it has the power to appoint members of the distributing bodies? It is none other than the Secretary of State, who can also give them directions as to how they should distribute the proceeds. For the last time—

Mr. Chris Smith: Will the hon. Gentleman give way?

Mr. Ainsworth: I was just about to quote again from the Secretary of State's book, but I give way.

Mr. Smith: I am grateful to the hon. Gentleman for giving way. I am tempted to observe that the face may have changed, but the speech has not. He must accept that all the existing distributors in arts, sport, heritage and charities fall under exactly the same qualification of appointment by the Secretary of State and being subject to directions from the Secretary of State to which he has just referred.

Mr. Ainsworth: Will the Secretary of State deny that the Bill contains new powers that he can exercise in that direction? No, he will not deny it.

Mr. Smith: Let me make it perfectly clear: the new opportunities fund will operate in exactly the same way and under exactly the same rules as the other distributors. Parliament will have the power to introduce new initiatives from time to time, but the independence of the new opportunities fund as a body will be exactly the same as that of the other distributors.

Mr. Ainsworth: The fact is that the Bill and the measure to which I have referred, which the Secretary of State appears not to affirm, is a wholesale attack on the existing good causes and represents a major extension of the Government's control over the national lottery and those who are likely to benefit from it.
For the last time, I shall refer to the Secretary of State's book. [HON. MEMBERS: "More."] I have already referred to it almost as many times as the Secretary of State referred to it in his recent article in The Spectator and I

do not want to give it any more publicity. In a sinister example of new Labour-speak, the right hon. Gentleman says:
We now have the chance to reorient"—
I like that—
the lottery so that it reflects more closely the people's priorities.
We know that, in new Labour-speak, the "people's priorities" are in fact the Government's priorities. The Government always think that they know best. The Bill takes away control from the distributing bodies and gives it to the Government; it takes money away from the arts, sports, heritage and charities and gives it to the Government; it breaks the principle of the arm's-length management and extends the dead hand of Government control to lottery procedures. That is the way to create, not a people's lottery, but a Government's lottery and a lottery for bureaucrats. That is a way to expand political patronage at the expense of the original good causes.
Throughout the debates on the Bill, the Government have failed to acknowledge those concerns and have resorted to the evasion and sophistry that are becoming their hallmark.
The Bill betrays not only the promises made by Ministers before the general election—we are used to that, although that would be bad enough—but the national lottery that we created. On those grounds, I urge my hon. Friends to oppose the Third Reading of the Bill.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 278, Noes 129.

Division No. 289]
[9.59 pm


AYES


Adams, Mrs Irene (Paisley N)
Casale, Roger


Ainsworth, Robert (Cov'try NE)
Chapman, Ben (Wirral S)


Allen, Graham
Chisholm, Malcolm


Anderson, Donald (Swansea E)
Clapham, Michael


Anderson, Janet (Rossendale)
Clark, Rt Hon Dr David (S Shields)


Ashton, Joe
Clark, Dr Lynda


Austin, John
(Edinburgh Pentlands)


Banks, Tony
Clark, Paul (Gillingham)


Barnes, Harry
Clarke, Rt Hon Tom (Coatbridge)


Bayley, Hugh
Clarke, Tony (Northampton S)


Beard, Nigel
Clelland, David


Bennett, Andrew F
Clwyd, Ann


Berry, Roger
Coaker, Vernon


Best, Harold
Coffey, Ms Ann


Betts, Clive
Coleman, Iain


Blears, Ms Hazel
Connarty, Michael


Blizzard, Bob
Cooper, Yvette


Blunkett, Rt Hon David
Cranston, Ross


Boateng, Paul
Crausby, David


Bradley, Keith (Withington)
Cryer, Mrs Ann (Keighley)


Bradley, Peter (The Wrekin)
Cummings, John


Bradshaw, Ben
Cunliffe, Lawrence


Brinton, Mrs Helen
Cunningham, Rt Hon Dr John


Brown, Rt Hon Nick (Newcastle E)
(Copeland)


Brown, Russell (Dumfries)
Cunningham, Jim (Cov'try S)


Browne, Desmond
Darling, Rt Hon Alistair


Buck, Ms Karen
Darvill, Keith


Burden, Richard
Davey, Valerie (Bristol W)


Burgon, Colin
Davidson, Ian


Caborn, Richard
Davies, Rt Hon Denzil (Llanelli)


Campbell, Alan (Tynemouth)
Davis, Terry (B'ham Hodge H)


Campbell, Mrs Anne (C'bridge)
Dawson, Hilton


Campbell-Savours, Dale
Dean, Mrs Janet


Canavan, Dennis
Denham, John


Caplin, Ivor
Dismore, Andrew






Dobbin, Jim
Lewis, Ivan (Bury S)


Dobson, Rt Hon Frank
Lewis, Terry (Worsley)


Donohoe, Brian H
Liddell, Mrs Helen


Drew, David
Linton, Martin


Eagle, Angela (Wallasey)
Livingstone, Ken


Eagle, Maria (L'pool Garston)
Llwyd, Elfyn


Edwards, Huw
Lock, David


Efford, Clive
Love, Andrew


Ellman, Mrs Louise
McAllion, John


Ennis, Jeff
McAvoy, Thomas


Fisher, Mark
McCabe, Steve


Fitzsimons, Lorna
McCafferty, Ms Chris


Flint, Caroline
McCartney, Ian (Makerfield)


Flynn, Paul
McDonagh, Siobhain


Foster, Rt Hon Derek
McDonnell, John


Foster, Michael Jabez (Hastings)
McFall, John


Foster, Michael J (Worcester)
McKenna, Mrs Rosemary


Gapes, Mike
McNulty, Tony


Gardiner, Barry
Mactaggart, Fiona


Gerrard, Neil
McWalter, Tony


Gilroy, Mrs Linda
Mahon, Mrs Alice


Goggins, Paul
Marsden, Gordon (Blackpool S)


Golding, Mrs Llin
Marshall, David (Shettleston)


Gordon, Mrs Eileen
Marshall, Jim (Leicester S)


Griffiths, Jane (Reading E)
Marshall-Andrews, Robert


Griffiths, Nigel (Edinburgh S)
Martlew, Eric


Grogan, John
Maxton, John


Gunnell, John
Meale, Alan


Hain, Peter
Michael, Alun


Hall, Mike (Weaver Vale)
Michie, Bill (Shef'ld Heeley)


Hall, Patrick (Bedford)
Milburn, Alan


Hamilton, Fabian (Leeds NE)
Miller, Andrew


Hanson, David
Mitchell, Austin


Heal, Mrs Sylvia
Moffatt, Laura


Henderson, Ivan (Harwich)
Moonie, Dr Lewis


Hepburn, Stephen
Moran, Ms Margaret


Heppell, John
Morgan, Ms Julie (Cardiff N)


Hewitt, Ms Patricia
Morgan, Rhodri (Cardiff W)


Hill, Keith
Morley, Elliot


Hinchliffe, David
Morris, Ms Estelle (B'ham Yardley)


Hoey, Kate
Mudie, George


Hoon, Geoffrey
Mullin, Chris


Hope, Phil
Murphy, Jim (Eastwood)


Hopkins, Kelvin
Norris, Dan


Howells, Dr Kim
O'Brien, Bill (Normanton)


Hoyle, Lindsay
O'Brien, Mike (N Warks)


Hughes, Ms Beverley (Stretford)
O'Hara, Eddie


Hughes, Kevin (Doncaster N)
Olner, Bill


Humble, Mrs Joan
O'Neill, Martin


Hutton, John
Osborne, Ms Sandra


Iddon, Dr Brian
Palmer, Dr Nick


Jackson, Ms Glenda (Hampstead)
Pearson, Ian


Jackson, Helen (Hillsborough)
Pendry, Tom


Jenkins, Brian
Pickthall, Colin


Johnson, Miss Melanie
Pike, Peter L


(Welwyn Hatfield)
Plaskitt, James


Jones, Barry (Alyn & Deeside)
Pollard, Kerry


Jones, Mrs Fiona (Newark)
Pond, Chris


Jones, Ms Jenny
Pope, Greg


(Wolverh'ton SW)
Prentice, Ms Bridget (Lewisham E)


Jones, Jon Owen (Cardiff C)
Prentice, Gordon (Pendle)


Jones, Dr Lynne (Selly Oak)
Prescott, Rt Hon John


Jones, Martyn (Clwyd S)
Primarolo, Dawn


Keeble, Ms Sally
Prosser, Gwyn


Keen, Alan (Feltham & Heston)
Purchase, Ken


Kennedy, Jane (Wavertree)
Quin, Ms Joyce


Khabra, Piara S
Quinn, Lawrie


Kidney, David
Rammell, Bill


Kilfoyle, Peter
Rapson, Syd


King, Andy (Rugby & Kenilworth)
Raynsford, Nick


Kingham, Ms Tess
Reed, Andrew (Loughborough)


Ladyman, Dr Stephen
Reid, Dr John (Hamilton N)


Laxton, Bob
Roche, Mrs Barbara


Lepper, David
Rogers, Allan


Leslie, Christopher
Rooker, Jeff


Levitt, Tom
Ross, Emie (Dundee W)





Rowlands, Ted
Thomas, Gareth (Clwyd W)


Roy, Frank
Thomas, Gareth R (Harrow W)


Russell, Ms Christine (Chester)
Tipping, Paddy


Salter, Martin
Todd, Mark


Sawford, Phil
Touhig, Don


Sedgemore, Brian
Trickett, Jon


Sheerman, Barry
Truswell, Paul


Sheldon, Rt Hon Robert
Turner, Dennis (Wolverh'ton SE)


Simpson, Alan (Nottingham S)
Turner, Dr George (NW Norfolk)


Singh, Marsha
Vaz, Keith


Skinner, Dennis
Vis, Dr Rudi


Smith, Rt Hon Chris (Islington S)
Walley, Ms Joan


Smith, Miss Geraldine
Ward, Ms Claire


(Morecambe & Lunesdale)
Wareing, Robert N


Smith, Llew (Blaenau Gwent)
Watts, David


Soley, Clive
Welsh, Andrew


Southworth, Ms Helen
White, Brian


Spellar, John
Williams, Rt Hon Alan


Squire, Ms Rachel
(Swansea W)


Starkey, Dr Phyllis
Williams, Alan W (E Carmarthen)



Williams, Mrs Betty (Conwy)


Steinberg, Gerry
Wills, Michael


Stevenson, George
Winnick, David


Stewart, David (Inverness E)
Winterton, Ms Rosie (Doncaster C)


Stewart, Ian (Eccles)
Wise, Audrey


Stinchcombe, Paul
Wood, Mike


Stoate, Dr Howard
Woolas, Phil


Stringer, Graham
Wright, Anthony D (Gt Yarmouth)


Stuart, Ms Gisela
Wright, Dr Tony (Cannock)


Sutcliffe, Gerry
Wyatt, Derek


Swinney, John



Taylor, Rt Hon Mrs Ann
Tellers for the Ayes:


(Dewsbury)
Mr. David Jamieson and


Taylor, David (NWLeics)
Mr. Jim Dowd.




NOES


Ainsworth, Peter (E Surrey)
Fox, Dr Liam


Ancram, Rt Hon Michael
Fraser, Christopher


Atkinson, David (Bour'mth E)
Garnier, Edward


Atkinson, Peter (Hexham)
Gibb, Nick


Baldry, Tony
Gillan, Mrs Cheryl


Bercow, John
Gray, James


Beresford, Sir Paul
Green, Damian


Body, Sir Richard
Greenway, John


Boswell, Tim
Grieve, Dominic


Bottomley, Peter (Worthing W)
Gummer, Rt Hon John


Bottomley, Rt Hon Mrs Virginia
Hague, Rt Hon William


Brady, Graham
Hamilton, Rt Hon Sir Archie


Brooke, Rt Hon Peter
Hammond, Philip


Browning, Mrs Angela
Hayes, John


Bruce, Ian (S Dorset)
Heald, Oliver


Burns, Simon
Heathcoat-Amory, Rt Hon David


Butterfill, John
Hogg, Rt Hon Douglas


Cash, William
Howarth, Gerald (Aldershot)


Chapman, Sir Sydney
Hunter, Andrew


(Chipping Barnet)
Jack, Rt Hon Michael


Chope, Christopher
Jackson, Robert (Wantage)


Clappison, James
Jenkin, Bernard


Clark, Rt Hon Alan (Kensington)
Johnson Smith,


Clifton-Brown, Geoffrey
Rt Hon Sir Geoffrey


Collins, Tim
Kirkbride, Miss Julie


Colvin, Michael
Laing, Mrs Eleanor


Cormack, Sir Patrick
Lait, Mrs Jacqui


Cran, James
Lansley, Andrew


Davies, Quentin (Grantham)
Letwin, Oliver


Davis, Rt Hon David (Haltemprice)
Lewis, Dr Julian (New Forest E)


Dorrell, Rt Hon Stephen
Lidington, David


Duncan, Alan
Lilley, Rt Hon Peter


Duncan Smith, lain
Lloyd, Rt Hon Sir Peter (Fareham)


Evans, Nigel
Loughton, Tim


Faber, David
Luff, Peter


Fabricant, Michael
Lyell, Rt Hon Sir Nicholas


Fallon, Michael
MacGregor, Rt Hon John


Flight, Howard
Mcintosh, Miss Anne


Forth, Rt Hon Eric
MacKay, Andrew


Fowler, Rt Hon Sir Norman
Maclean, Rt Hon David






McLoughlin, Patrick
Stanley, Rt Hon Sir John


Madel, Sir David
Steen, Anthony


Malins, Humfrey
Streeter, Gary


Maples, John
Swayne, Desmond


Mates, Michael
Syms, Robert


Maude, Rt Hon Francis
Tapsell, Sir Peter


May, Mrs Theresa
Taylor, Ian (Esher & Walton)


Moss, Malcolm
Taylor, Sir Teddy


Nicholls, Patrick
Townend, John


Page, Richard
Tredinnick, David


Paice, James
Trend, Michael


Paterson, Owen
Tyrie, Andrew


Pickles Eric
Viggers, Peter


Prior, David
Water, Robert


Redwood, Rt Hon John
Wardle, Charles



Whittingdale, John


Robathan, Andrew
Widdecombe, Rt Hon Miss Ann


Robertson, Laurence (Tewk'b'ry)
Wilkinson, John


Roe, Mrs Marion (Broxboume)
Willetts, David


Ruffley, David
Wilshire, David


St Aubyn, Nick
Winterton, Mrs Ann (Congleton)


Sayeed, Jonathan
Winterton, Nicholas (Macclesfield)


Shephard, Rt Hon Mrs Gillian
Woodward, Shaun


Simpson, Keith (Mid-Norfolk)
Yeo, Tim


Soames, Nicholas



Spelman, Mrs Caroline
Tellers for the Noes:


Spicer, Sir Michael
Mr. John M. Taylor and


Spring, Richard
Mr. Stephen Day.

Question accordingly agreed to.

Bill read the Third time, and passed, with amendments.

BUSINESS OF THE HOUSE

Motion made, and Question put forthwith, pursuant to Standing Order No. 15 (Exempted business),
That, at this day's sitting, the National Lottery Bill [Lords] and the Late Payment of Commercial Debts (Interest) Bill [Lords] may be proceeded with, though opposed, until any hour.—[Mr. Betts.]

Question agreed to.

Late Payment of Commercial Debts (Interest) Bill [Lords]

As amended (in the Standing Committee), considered.

Clause 6

RATE OF STATUTORY INTEREST

Mrs. Cheryl Gillan: I beg to move amendment No. 1, in page 4, line 1, leave out
'made with the consent of the Treasury'.

Mr. Deputy Speaker (Sir Alan Haselhurst): With this, it will be convenient to discuss the following amendments: No. 2, in page 4, line 10, at end insert—
'(c) avoid the risk that purchasers enjoying a dominant
position in a market may seek to renegotiate payment terms to the disadvantage of suppliers in that market.'.
No. 3, in page 4, line 10, at end insert—
'(3) The power to make an Order under subsection (1) above is without prejudice to the making of a further Order varying the provision made under paragraph (a) or (b) of that subsection.
(4) No Order shall he made under subsection (3) unless any preceding Order under that subsection (or, as the case may be, an Order under subsection (1)) has been in force for at least six months.'.
No. 4, in page 4, line 10, at end insert—
'(3) The Secretary of State shall ensure that the terms of any order under this section are promulgated by such means as are calculated to bring them to the attention of businesses and other commercial undertakings as effectively and speedily as possible.'.

Mrs. Gillan: On 14 May, in Committee, I said that. due to the Minister's unsatisfactory responses, I intended to raise matters concerning the interest rate on Report. This group of amendments gives the Minister a chance to clarify the area that she dealt with so inadequately then.
I wish to deal first with the setting of the rate of interest and then the communication of that rate of interest to businesses and the speed and frequency with which the rate may change. In Committee, the Minister set great store by further consultations with business and others to establish the efficacy of the initial rate that was published in the draft order—the base rate plus 8 per cent. I hope that she can explain in detail how that can possibly work as it will be at least four years before some businesses can use the Bill against, for example, the public sector. Will they be excluded from the consultation process for the next four years? I presume that they will, but I hope that the Minister will categorically confirm or deny that point. If it is confirmed, a vast swathe of industry and business will be excluded from the consultation process that she has heralded.
Will the Minister explain in detail how, precisely, she arrived at the figure of 8 per cent? I believe that she initially favoured 4 per cent.—so she has doubled her original figure. That shows how wrong she was, so it is difficult to be reassured that she knows what she is doing.
The mechanisms in the Bill for setting the interest rate are similarly open to question, as the final rate will depend on the Minister's colleagues in the Treasury. Will she explain, in detail, how she expects the relationship


between her Department and the Treasury to work and how potential conflicts between the two Departments will be resolved?
There is no provision in the Bill to protect businesses from rapid rate changes at the whim of the Government. In Committee, the Minister failed to answer my questions, so I hope that she will now deal with them. How frequently could the interest rate be changed? Will it be weekly, monthly or biannually? Would it not be better to provide a minimum period so that businesses could have some certainty? It is feasible that, in times of highly volatile interest rates, the rate could change daily as a result of these measures. The Minister has had due time to consider these matters and I hope that she will come forth with the answers.
Businesses are confused about how they will be told about the changes to the rate. The Minister has said that she will distribute a free users guide to businesses. Perhaps she will elaborate on that. How many copies of the guide will be printed? Does she intend to send it to all businesses, or is this another burden on businesses, which will have to make efforts to find out what is going on? What budget will be set aside for this leaflet? Will it be reprinted every time the rate changes?
The amendments were tabled because of the Minister's poor performance in Committee. I hope that she will now provide the answers to these questions.

Mr. Eric Forth: I shall concentrate my remarks on amendment No. 2, which I hope will force the Minister to return to the issue that my hon. Friends and I raised on Second Reading and in Committee. We fear that the Bill would induce companies in a dominant position to renegotiate their terms of trade with their suppliers if the burden of interest set under the Bill were to become too onerous. The more onerous the rate of interest, the greater is the incentive for purchasers to renegotiate their terms of trade.
We have argued throughout that there will be a great temptation for a company that faces an unduly harsh penalty to reconsider its terms of trade instead of being content to operate on a net 30-day basis—admittedly with the possibility that the payments made could drift out beyond that period.
My hon. Friend the Member for South-West Hertfordshire (Mr. Page) has frequently carried out his own expert analysis of the impracticability of a strict adherence to an over-strict payments regime. I hope that he will return to that argument, because I always enjoy hearing it. I would argue that it is certain that businesses, particularly when in a dominant position, will decide that if they are to he held strictly to an impractical 30-day payment regime, it would make a lot of sense to negotiate alternative terms of trade of 45, 60 or even 90 days with their suppliers to make the payment mechanism more operable and to ensure that penalties are not unnecessarily incurred.
The onus is therefore on the Minister to persuade us that such a response by a significant number of purchasers would be unlikely. If it is not, the whole argument behind the Bill will be shown to be fatally flawed. The amendment is a small but significant attempt to countermand such a natural response and inexorable process.
If what I fear actually comes about, it will make nonsense of the Bill. It has been said time and again during the Bill's previous stages that the purpose of the legislation, which I query, is to protect relatively small firms from being dominated or even exploited by larger ones. That argument is false because I suspect that as many late payment difficulties arise among small firms as between small and large firms. If the Bill succeeds in any of its objectives, it will thus end up penalising small firms as much as—perhaps even more than—large ones.
The amendment attempts to get round the dilemma thus:
purchasers enjoying a dominant position in a market may seek to renegotiate payment terms".
Although I do not know to what extent it will be effective, it at least recognises the dangers that I have outlined and tries to prevent their coming to pass. I want to hear from the Minister why my fears are unfounded and hence why the amendment is unnecessary. If she fails to explain that, I can only assume that her logic—it is usually impeccable—will drive her to accept the amendment, which is a mild but realistic attempt to correct an imbalance that I fear may arise if the Bill is enacted unamended.
My argument has not yet been properly answered, on Second Reading or in Committee. I therefore welcome the fact that my right hon. and hon. Friends have re-presented it, in the hope of a fuller answer from the Minister. The Minister looks as if she is in a generous and compliant mood tonight. I hope that, having heard my speech and the one I sense we are about to hear from my hon. Friend the Member for South-West Hertfordshire, she may be prepared to accept our amendment. Before we proceed any further, we at least expect a proper answer to our points.

Mr. Richard Page: Amendment No. 2 has about it the air of a hard commercial head butt. This is the amendment which shows why the Bill will be ineffective when it has to be implemented in the marketplace.
Despite what my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) said, I hope that he does not press the amendment to a Division. It would be impossible to implement, just as the whole Bill will be impossible to implement to the benefit of the small business sector for which it is designed. The Bill will have a marginal effect, which is one of the reasons it has not been introduced before.
I ask my right hon. Friend not to press the amendment because the Government have no answer to the question that lies behind it. He is absolutely right to ask for an answer. If a valid answer were forthcoming, it could revolutionise the approach to the Bill taken by some Conservative Members, but I strongly suspect that such an answer will not be forthcoming.
The amendment basically asks what is to stop a purchaser negotiating disadvantageous terms with a supplier. When a big boy is talking to a little boy, what is to stop the big boy negotiating terms that are disadvantageous to the little boy? In Committee, the Minister for Small Firms, Trade and Industry hinted coyly that certain things could be done to redress the balance. I should very much like to hear what could be done if the terms were felt to be unfair or out of kilter, but I strongly suspect that no response will be forthcoming.
The Bill will undoubtedly regularise credit terms, which must be welcome. Despite the blandishments of my right hon. Friend the Member for Bromley and Chislehurst, I shall not run through the credit cycle process for the third time. I have done so twice. When I read the record of my performance I was overcome by my brilliance, but a third time would be going too often to the well. However, I envisage certain phrases appearing in the arrangements made between companies, such as that payments will be made by X number of days after the monthly statement has been delivered. I envisage X being not 30 or 40, but 50 or 60, because companies will want to ensure that they cannot be caught by the statutory right to interest. I can see that number of days becoming a very comfortable cushion—a real protection against any possible charge of statutory interest.
The amendment aims to
avoid the risk that purchasers enjoying a dominant position in a market may seek to renegotiate payment terms to the disadvantage of suppliers in that market.
The Bill reveals the Government's lack of commercial knowledge; many credit arrangements are at odds with each other. How many suppliers supply goods on terms that do not match the purchasing orders? As my right hon. Friend the Member for Bromley and Chislehurst said, the Bill was introduced to protect small businesses, but I can see it being used to their disadvantage.
I should like the Minister to tell us what happens when a dominant supplier or purchaser draws up terms that are "considered unfair" for the smaller company. What will be done to protect the small business, which is what the Bill was designed to do? The explanations offered so far show that the Bill is flawed.
If I catch your eye, Mr. Deputy Speaker, among all those who no doubt will be clamouring to speak on Third Reading, I shall explain how all the aims of the Bill could be achieved by another means in a fraction of the time and at a fraction of the cost. I look forward to hearing what the Minister says about how the Bill will protect a small firm against a dominant supplier.

The Minister for Small Firms, Trade and Industry (Mrs. Barbara Roche): First, I congratulate the hon. Member for Chesham and Amersham (Mrs. Gillan) on her move to the shadow Foreign Office. Tonight's debate is almost her swan song in the role of shadow small business Minister. I have very much enjoyed our exchanges across the Dispatch Box and I shall certainly miss them.
I am not surprised, however, that the hon. Lady has been moved. After all, during one of her first interviews as shadow spokesman, in The Sunday Times on 30 November 1997, she was reported as attacking
her own party for losing the small-business vote at the general election. In an extraordinarily candid interview with the Federation of Small Businesses she admitted the Tory Government got its small business strategy wrong. 'Mea culpa,' she said. 'We did not get it right in all areas.'''
That was surely the understatement of the year. I understand the hon. Lady's embarrassment.
I appreciated the speeches of the right hon. Member for Bromley and Chislehurst (Mr. Forth) and the hon. Member for South-West Hertfordshire (Mr. Page).

The hon. Member for South-West Hertfordshire has always opposed the introduction of a statutory right to interest, as does the right hon. Member for Bromley and Chislehurst. Had his party been brave or foolhardy enough to do so, he would have voted against the Bill on Second Reading—but the Opposition dared not vote against it on Second Reading as they would have appeared to be anti-small business as well as lost the vote.
The hon. Member for Chesham and Amersham is in a very embarrassing position because, when she was first elected, she signed an early-day motion supporting the right to statutory interest. Not merely was she a signatory to it; she was one of the first six names.
I was startled when the Opposition tabled amendment No.1. After all, it was an Opposition amendment in another place that introduced the very words that it seeks to amend. However, we have come to expect U-turns from the shadow Trade and Industry team, and the hon. Lady has not disappointed us with her parting shot.
In another place, the Government were convinced by the arguments of Lord Home. In amending the rate of interest we shall take account of all views, if practically possible. Within the Government, we shall certainly wish to consult and be guided by the Treasury on any interest rate.
In view of amendment No.1, I should not be surprised by amendment No.2, but I am puzzled. It would oblige the Secretary of State to consider, among other factors, whether the rate would lead to dominant firms renegotiating their payment terms to the disadvantage of suppliers. To meet the new criterion wholly, it would be necessary to set the rate at 0 per cent; otherwise, theoretically, there may be the possibility of a dominant firm renegotiating a contract to avoid the interest rate. That is why it is entirely sensible for the hon. Member for South-West Hertfordshire to urge his party not to vote for the amendment tabled by its Front-Bench team.

Mr. Forth: The Minister seems to be arguing in a black and white way. We are talking about judgment. There may be an appropriate rate that could be applied and would be broadly accepted as reasonable, but if the rate became penal, dominant suppliers might be driven to renegotiate, as we fear. Surely the Minister will concede that somewhere between those two is the possibility of a rate that would work in most cases without driving companies to renegotiation. Her argument about a rate of 0 per cent. is too absolute. Will she not at least admit a balance of probability?

Mrs. Roche: I understand the right hon. Gentleman's argument. That is why we consulted and listened to the Bank of England. In a recent survey conducted by the Midland bank to be published next month, 79 per cent. of those surveyed supported the statutory right to interest, and 77 per cent. said that they would use it. Those who responded knew our proposal for the rate.
Taken to its logical conclusion, the amendment would result in policy following the lead of those who wanted to avoid its intent, which would be ridiculous.

Mr. Page: One reason why I urged that the amendment should not be put to a vote is that I know that my right hon. and hon. Friends appreciate its impracticality. Our aim is to ask how the Government are going to protect


small firms against a dominant supplier or purchaser if it is felt that the terms are becoming unreasonable. The hon. Lady is running around the park without addressing that fundamental question.

Mrs. Roche: I understand the hon. Gentleman's point. I am addressing the amendment, which was tabled by the Conservatives. Having studied the Bill closely, the hon. Gentleman will know that we have drafted it to protect small firms and prevent companies from contracting out of the legislation. The Bill safeguards the position of small businesses.
As I have said, I am puzzled by the amendment. In the other place, the Opposition Front-Bench team sought to ensure that the criteria for setting the rate of interest were not set in stone. We were persuaded that we should insert the words, "among other things". The hon. Member for Chesham and Amersham has reversed that policy.
Amendment No. 3 is unnecessary and unhelpful. There is no need to provide an order-making power to amend an order. The order to be made under subsection (1) can be amended simply by making another order under the same subsection. The proposed subsection (4) would prevent the Secretary of State from amending the interest rate for six months after making an order, regardless of any advice that she may have received from business and other representatives. That is not helpful.
I understand the concerns that have been expressed. It is important that changes to the interest rate are made known effectively and speedily. The Government have worked with trade associations, business representative organisations and the business links network to publicise the Bill and the likely interest rate. As part of the Better Payment Practice Group's campaign to improve the payment culture, we shall highlight the proposals through a publicity campaign.

Mrs. Gillan: I am pleased that the Minister has dealt with some of my points on this group of probing amendments. How often does she envisage the rate may change? Does she intend to go to the expense of republishing the leaflet every time it changes? For the sake of businesses listening to the debate, she should clarify the mechanism.

Mrs. Roche: I understand the hon. Lady's points. If she will bear with me for just one moment, I shall deal with them.
Following—I hope—Royal Assent, I shall publish a user's guide to the Bill, which businesses will be able to obtain free of charge. Members of the Better Payment Practice Group are committed to promulgating that guide. The Department will also write to trade associations and business links to ensure that they are aware of the guide and can inform their members of how they may obtain their free copies. By those means, we can effectively bring to the attention of business the initial interest rate.
Should it be necessary to change the rate—I am not going to predict at this stage how frequently it will change—we will use similar routes to inform businesses of the change. Incidentally, that same commitment to providing information applies to other orders made under the Bill, such as the commencement orders for the phasing arrangements.
For the first time, all business representative organisations are sitting down together to do something about improving the culture of late payment—something which the previous Government failed to achieve. I urge the House to oppose the amendments if they are not withdrawn.

Mrs. Gillan: I thank the Minister for her kind remarks at the beginning of her response to the group of amendments.

Mr. Clive Betts: It did not last long.

Mrs. Gillan: I, too, will miss the Minister. I have enjoyed our exchanges across the Dispatch Box, although I have not enjoyed her hackneyed comments. Like my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth), I wish that she would get some new material; this audience is certainly very tired of it.
When I signed the early-day motion, I naively thought that statutory interest on late payment of debt might solve the problem and change the culture. It was only when I went into the matter in detail with Ministers in the Department of Trade and Industry, and businesses and trade associations, that I realised that the proposal was not a panacea, but yet another burden on business.
The Minister ought to be embarrassed because, in an interview in Network, she admitted that almost 60 per cent. of lobby groups representing smaller businesses were opposed to a statutory right to interest on late payment of debts. I have nothing to be embarrassed about, but the Minister should be ashamed that she is proposing legislation which, she admits, is not popular among smaller businesses.
The Minister has not addressed the questions that my right hon. and hon. Friends and I have raised; I am certainly not satisfied with the answers. She has ducked the question of how often the interest rate will change. Indeed, it seems that it could change daily. She failed to address the fact that many businesses will be excluded from taking any meaningful part in the consultation process, which she keeps going on about. Such businesses will not be able to exercise the protection afforded by the Bill, particularly against the public sector, so they can hardly be consulted on it.
The Minister has not even given any indication of how much money will be set aside in the Department to promote the rate of statutory interest for businesses. She says that she will produce the leaflet free of charge; I hope that she has the budget to produce a leaflet as many as 365 times a year. If interest rate changes demand it, that is what she will have to do. She said that she is writing to trade associations and businesses links. I must tell her that not all small businesses are either members of trade associations or have contact with business links. In other words, she is quite prepared to leave a large swathe of small businesses in ignorance or put them to the time, trouble and expense—which can hurt a small business—of finding out what her large Department is proposing.
It is clear that the Minister has not, and will not, respond well to the amendments. They were tabled as probing amendments to try to elicit decent and healthy responses, which have not been forthcoming. In view of


the lack of information from the Government, it is not even worth pressing the amendment to a vote. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 11

TREATMENT OF ADVANCE PAYMENTS OF THE CONTRACT PRICE

Mrs. Roche: I beg to move amendment No. 8, in page 5, line 37, leave out from beginning of line to end of line 43 and insert—
'.—(1) A qualifying debt created by virtue of an obligation to make an advance payment shall be treated for the purposes of this Act as if it was created on the day mentioned in subsection (3), (4) or (5) (as the case may be).
(2) In this section "advance payment" means a payment falling due before the obligation of the supplier to which the whole contract price relates ("the supplier's obligation") is performed, other than a payment of a part of the contract price that is due in respect of any part performance of that obligation and payable on or after the day on which that part performance is completed.'.

Mr. Deputy Speaker: With this, it will be convenient to discuss Government amendment No. 9.

Mrs. Roche: Following the Committee, we reviewed the Bill to ensure that none of the amendments agreed to had inadvertently caused things to fall outside the Bill that we would wish to be covered. Amendment No. 8 picks up the one issue we have identified. Its purpose is to ensure that the Bill operates on stage payments—that is, interim payments in respect of work actually done.
During discussions in the other place, the Government tabled an amendment to clarify the operation of clause 4 on the period for which statutory interest runs. Inadvertently, however, that amendment has put stage payments into a state of limbo as they are caught by the definition of an advance payment in clause 11, although the clause does not stipulate from when interest will run.
10.45
Rather than invent a rule in clause 11 for genuine stage payments, we think the best approach is to take them out of clause 11 altogether. That is achieved through amendment No. 8. The effect of the amendment is that stage payments, where the payments are for work already done, are dealt with under clause 4(3) and (5) as appropriate.
Amendment No. 9 is consequential on amendment No. 8. The new wording requires a change in the word structure in clause 11(4). It also serves to remove an element of ambiguity, as the obligation to pay the price is, in one sense, always present in a supply contract. These are technical amendments which improve the scope of the Bill and I commend them to the House.

Mrs. Gillan: I do not know how long the Minister has been working on the Bill, but she has had at least a year in government. At this late stage, she is still proposing changes under the guise of technical amendments.
In the other place, the Government tabled no fewer than 52 amendments. In Committee, another five were tabled by the Minister. Tonight, we have two further

amendments, making a grand total of 59 amendments to what she claims is a well-researched Bill. What is she up to? How can anyone have confidence in a measure that still requires modifications at this stage? I am sick to death of hearing from the Government that everything is under review. Surely by the time they propose legislation, the Government should have made up their mind about what they want to do without having to introduce remedial drafting at every stage in both Houses.
I understand what the Minister wishes to achieve with the amendments, but what guarantees do we have that she will not find further flaws after the Bill has received Royal Assent? Nothing would surprise me. This is amateurish behaviour. In Committee, I had the impression that the Minister had finished hacking the Bill around. Tonight's performance indicates that, once again, she has decided to move the goalposts, a situation that is much to be regretted and which places another burden on businesses, which are trying to follow the passage of a Bill that has changed almost daily.
The Minister has said that businesses need a stable environment and a degree of certainty in which to operate. She has made a real pig's ear of the Bill, while failing to listen to any constructive suggestions from the Opposition. I hope that she can tell the House whether, finally, she is satisfied with the Bill or whether there are more surprises in store.

Mrs. Roche: Oh dear, oh dear! In Committee, I suddenly felt overwhelming sympathy for the hon. Member for Chesham and Amersham (Mrs. Gillan)—for whom I have a great deal of time—because she suddenly seemed to suffer a severe memory lapse about what happened under the previous Government, of which she was a member.
The hon. Lady rightly wants to ensure that we get the Bill right. We believe that small businesses deserve nothing but the best, which is why we listen and consider. I remind her of what happened during consideration of the Gas Act 1995; on Report, the then Minister for Energy tabled 20 amendments.

Mr. Deputy Speaker: I understood that the hon. Member for Chesham and Amersham (Mrs. Gillan) was making a preliminary remark before coming to the point. However, now that she has finished her preliminary remarks, which were not particularly pertinent to the amendment, we do not need to have another debate outside the scope of the amendment.

Mrs. Roche: I absolutely agree with you, Mr. Deputy Speaker, which is why I did not mention in my opening remarks the fact that, during consideration of the Education Act 1997, the hon. Lady, as a Minister, tabled on Report the widely criticised amendment No. 65—I knew that you would reproach me if I did.
I have tabled Government amendment No. 8 to improve the Bill and I commend it to the House.

Amendment agreed to.

Amendment made: No. 9, in page 6, line 9, leave out
'the obligation to pay it arises'
and insert 'is payable'.—[Mrs. Roche.]

Clause 17

SHORT TITLE, COMMENCEMENT AND EXTENT

Mrs. Gillan: I beg to move amendment No. 5, in page 8, line 5, at beginning insert
'Subject to subsection (2A) below,'.

Mr. Deputy Speaker: With this, it will be convenient to discuss the following amendments: No. 11, in page 8, line 5, after 'force', insert—

'(a) as respects contracts where both the purchaser and the supplier employ more than 50 persons, at the end of the period of three months beginning with the day on which this Act is passed; and
(b) as respects any other contract,'.
No. 6, in page 8, line 10, at end insert—
'(2A) The power to make orders under subsection (2) shall not be exercised so as to provide for this Act to come into force, as respects contracts where the purchaser is a government department or a local or public authority, on different dates according to whether the supplier employs more than a prescribed number of persons.'.
No. 7, in page 8, line 10, at end insert—
'(2A) Where the power under subsection (2) to make different provision for different purposes is exercised by reference to the number of persons employed by a supplier, the Secretary of State shall publish—

(a) the criteria used in specifying that number and,
(b) the steps taken to ascertain whether that number is regarded as appropriate for the purposes of this subsection by persons representing businesses and other commercial undertakings.'.

Mrs. Gillan: Once again, the amendments have been tabled to allow the Minister to clarify her thinking and to reveal her views on an extremely important part of the Bill's enabling powers—the phasing-in proposals. Sadly, the Minister proposes to prevent a significant proportion of businesses from using the Bill against Government Departments and agencies—the public sector. Businesses employing 50 or more employees will have to wait for four years before they can use the measure in their dealings with Government. In Committee, the Minister gave me the impression that she could change the proposals if she wanted to. However, she then bottled out and ducked the issue, which was of great regret to Conservative Members. I hope that, in tabling the amendments, we have given her a final opportunity to make amends.
In my discussions with the Forum of Private Business—an organisation with which I know the Minister is familiar—I discovered that it felt aggrieved that she had not responded to my proposals or to its requests. There is a strong case for making the public sector subject immediately after the measure's implementation to payment of interest on all contracts. That is important both because of the trickle-down effect of better payment and because the public sector will largely escape liability until the final phase, as it principally trades with those business that the Minister defines as large—those with 50 or more employees. That does not seem to fit well with the Government's objective of leading the change.
In Committee, I cited a case in which the company Davall Relays had suffered at the hands of the Meteorological Office—the Meteorological Office

withdrew a contract when the company asked it to pay within 30 days. I suspect that the Minister will say that the Meteorological Office was operating under the same terms and conditions that applied under the previous Government, but she must realise that the case I mentioned happened under the Labour Government, at a time when she was saying that no one should pay debts late.
The Minister has done me the courtesy to reply to my letter, although I received her response only at 8.30 pm. I was wondering whether I would receive a response before our considerations tonight, but she replied just in time, which is better than what happens when one writes to some other Government Departments, which take three or four months to reply. I raise the matter as I have yet to be satisfied that the Minister is not, yet again, protecting Government to the disadvantage of smaller businesses—certainly those with 50 or more employees.
The letter that I received confirmed that the Meteorological Office, when asked for a written undertaking that a payment be made within 30 days, "technically" thought that that constituted a counter-offer to its order, and therefore cancelled the order. The Minister wrote:
I understand that the contracts used to purchase items with an order value less than £500
that applied to the order that we are discussing—
had been in use for many years. It seems, unfortunately, that the Meteorological Office were reluctant to make an isolated change to the long standing standard conditions of their contracts. They therefore withdrew their offer.
That was at a time when the Government were legislating for statutory interest on late payment of debt, with all the warm words being issued by the Minister and her Department.
There was light at the end of the tunnel, however. The Minister's letter continued:
I am pleased to report that the Meteorological Office has now, in anticipation of enactment of the Late Payment of Commercial Debts (Interest) Bill, changed the terms of their orders to expressly reflect that they will pay all valid invoices on orders less than £500 within 30 days of receipt of an invoice.
What of those over £500? Will the Minister tell us now whether she will insist that the Meteorological Office change its terms and conditions to apply to all contracts? If not, I think that business will see that this is a sham. It is appalling that a letter from a Minister who is taking legislation through at this stage should say only that it will apply to another Department for "orders less than £500". I am astounded.

Mr. Forth: I hope that I am not pre-empting my hon. Friend. Should not the Minister also reassure us that she has reassured herself—in detail—that the Meteorological Office is capable of fulfilling the undertakings given in the letter? Given the expert analysis that our hon. Friend the Member for South-West Hertfordshire (Mr. Page) has made repeatedly, I wonder—and I suspect that my hon. Friend may wonder—whether the office is capable of meeting the very tight undertaking that it has given. If not, is that undertaking worth the paper on which it is written?

Mrs. Gillan: My right hon. Friend makes a valid point, with which I think the Minister will have to deal when she responds. If she does not, serious question marks will remain over the Government.
Equally important is the danger that, unless the measure is applied to all public sector debts, small businesses—as the Minister has defined them—may face discrimination in public procurement, as purchasing bodies avoid suppliers against whom they could face statutory interest. That is particularly pertinent in the light of the health service's record. More than 2 million bills are paid late by the health service alone, and it would, therefore, be in the interest of another part of Government to adjust its purchasing patterns for the next four years to avoid more expenditure in an area of Government that has already been grossly let down by the present Labour Administration.
I hope that the Minister will set some targets according to which she can measure the success of the Bill, which in my view is otiose. It has long been feared that the legislation will lead to longer payment periods. I am not aware of anything that will prevent purchaser companies with a dominant position in the market from renegotiating payment terms to run into, for example, 120 days instead of 40 days. That means that the vendor will not get his money more quickly if too high an interest rate is set. Will the Minister now confirm that she expects no supplier to be worse off under the Bill, and will she now undertake to set and monitor the criteria by which her progress can be charted and her warm words can be judged by real commercial standards? I await her response with interest.

11 pm

Mr. Brian Cotter: I rise to speak to amendment No. 11, tabled in my name and that of my hon. Friend the Member for Eastleigh (Mr. Chidgey). As hon. Members will be aware, the Liberal Democrats have long argued for a statutory right of interest on late payment of debts, and we welcome the legislation. However, as is often the case, the devil is in the detail, and our amendment would rectify a glaring error.
At all stages, the Government have argued that the Bill is for the benefit of small businesses, and is intended to improve the crippling late-payment culture and to begin to put an end to the commercial exploitation of small firms by large firms. The Minister has also argued that the Government should give an example. However, as the Bill stands, large businesses are exempt from the right to charge statutory interest on other large businesses at the initial phase. In fact, large business will not be able to charge large business until the final phase of introduction. Why? Clearly, there is no economic rationale for that aspect of the phasing arrangements. In fact, the arrangements clearly contradict the intentions of the Bill, which are to improve the late-payment culture, specifically for small businesses, and will not enhance those objectives.
The Government are sending out the wrong message to small businesses in that they are not prepared to make large firms part of the initial phase. A better payment practice between large companies would also have a desirable trickle-down effect on the economy, as the hon. Member for Chesham and Amersham (Mrs. Gillan) said. The late-payment culture would be improved, and firms would be encouraged to use better credit management procedures, as was discussed on Second Reading.
Our amendment would also ensure that government, at all levels, would be liable to pay statutory interest to firms with 50-plus employees—the public sector will

largely escape liability until the final phase is introduced. That does not seem to accord with the Government's intention, which was to lead the change, and does not provide the example that the Government should be setting. The Minister will acknowledge that she accepted during Trade and Industry questions that the Government's record on payment was not good, so it seems hypocritical of them to put businesses in a position in which they are liable to pay, when they are not prepared to put themselves in a similar position.
Businesses have had and continue to have problems receiving payment from government at all levels. A colleague produced one example, and I have been assured that the legal aid fraternity is not good at settling bills. I am also greatly concerned about local government. We know that it is under some pressure with regard to financial settlements and that there will be the temptation for it to find all the ways it can in which to hold up payments, with the effect that I described.
The wait-and-see approach that the Minister seems to be adopting is unsatisfactory. There is a general consensus in support of the phasing arrangements, but there is also a clear feeling that the Government should give an example. Feedback from various business organisations suggests that the current large against large arrangement, particularly the public sector aspect, is inadequate. The Forum of Private Business has conducted discussions on the issue, and seems to be well informed on the Bill. In discussions with representative organisations on the Better Payment Practice Group, it has found strong support for idea that the Government should be brought into the first phase.
If the Government are not prepared to accept the amendment, the Liberal Democrats will certainly monitor Government payment practice.

Mrs. Gillan: Oh gosh.

Mr. Cotter: We will, indeed. We will name and shame when the opportunity arises, in line with the Government's argument.
Our significant amendment would weigh the Bill in favour of small businesses. I ask the Minister to consider it seriously.

Mrs. Roche: As regards amendments Nos. 5 and 6, there was extensive discussion in Committee of possible extension of phasing arrangements to include claims by all businesses against the public sector. As I have said, however, support for the Government's phasing proposals was considerable, as 87 per cent. of the business respondents to our Green Paper who expressed a view supported phasing. The hon. Member for Weston-super-Mare (Mr. Cotter) would surely agree that all small businesses will be able to claim against the public sector immediately the Bill becomes law. What is important about phasing is the opportunity that it gives to small businesses, which suffer most from late payment, to take advantage of the Bill straight away.

Mrs. Gillan: How many businesses employing fewer than 50 people have contracts with the Government, and how many businesses employing more than


50 people have such contracts? What percentage of businesses fall into the Minister's categorisations of small and large businesses?

Mrs. Roche: I can see why the hon. Lady is moving to sunnier climes. Her question exposes her ignorance of the way in which the sector is structured. We are talking about not only direct contracts with the Government, but the whole contractual supply chain. That is why it is important that the phasing arrangements give small businesses the right to take action straight away.
We shall monitor carefully the effect of the legislation, not least through the payment observatory of the credit management research group at Bradford university, the establishment of which the hon. Member for Weston-super-Mare has welcomed. If there seems to be a need to extend the right to large businesses earlier than we intend at present, we can do so under clause 17(2), after consulting interested parties, including the Better Payment Practice Group. However, given the support for the Government's proposals, I do not feel bound to amend the Bill at this late stage. We shall keep the matter under review.
The same arguments apply to amendment No. 11, which seeks to extend phasing proposals to allow large businesses to claim against other large businesses from initial commencement. Should experience show that it is desirable to extend that right earlier than currently planned, the Government will do so. I made that clear in Committee, and I repeat it now.

Mr. Cotter: indicated assent.

Mrs. Roche: I am pleased to see that the hon. Gentleman agrees.
As regards amendment No. 7, we fixed a threshold of 50 or fewer employees to define a small business, because a definition is needed for the initial transitional phases of the legislation, and it is important to small businesses that that definition should be transparent.
We have set the threshold at 50 employees, which catches all micro-businesses, because we believe that any company employing more than 50 should be able to employ someone to manage the payment of bills. In using 50, we have used one of the limbs of the definition of a small firm in the Companies Act.
The Government are pursuing other measures to ensure that small businesses, that is, those employing 50 or fewer staff, have the opportunity to develop the skills necessary to manage their payments. Reference has rightly been made to the Forum of Private Business. Its survey of its membership showed that only 29 per cent. of respondents opposed the size criteria.
I thank the hon. Member for Chesham and Amersham (Mrs. Gillan) for her kind remarks about my speedy response to her inquiry. I am delighted that, in anticipation of the Bill, we have been able to correct a payment practice that had existed in the office concerned for some years under the Government of which she was a member. That shows our commitment.

Mrs. Gillan: Will the Minister now get to the point and say whether she will insist that the Meteorological Office applies the same new criteria to all bills over £500?

Mrs. Roche: rose— [Interruption.]

Mrs. Roche: Perhaps the hon. Lady would have the courtesy for one moment to let me answer; I know how

impatient she is. She knows that all Departments are required to pay their bills within 30 days or as otherwise agreed. I am glad that she gave me the opportunity to point out, through the illustration provided by that case, that the thought of this legislation is biting already. It ill behoves someone who served in the Government of the former Deputy Prime Minister, who boasted about stringing along his creditors and set such a bad example to small business, to criticise this Government. If the amendments are pressed, I urge the House to reject them.

Mr. Cotter: rose—

Mr. Deputy Speaker: Order. The hon. Gentleman cannot speak a second time. Only the mover of the lead amendment can do so.

Mrs. Gillan: I am shocked by the Minister's response. It is obvious that she is being blackmailed into her position by her colleagues. She says that she relies on the consultation, which showed that the phasing in was widely supported; but, of course, that consultation was deeply flawed. If she had asked all businesses, "Should all businesses be able to take the protection of this legislation from day one?" they would have replied with a resounding and overwhelming yes in dealing with the public sector. It is obvious that she is seeking to protect other Departments, particularly those with gross late payment records, which may incur large sums of interest by way of penalty. In particular, I am thinking of the Department of Health, which, by the Government's own admission, will pay some 2 million bills late.
I am very sad that the hon. Lady, who appeared to be cracking in Committee, has been forced back into this position. She is now introducing legislation that discriminates against all firms with more than 50 employees and cuts them off from the very lifeline that she has purported to extend to them. This is a gross abrogation of the duties that she took upon herself in taking on her ministerial duty. I am very disappointed. It is obvious that she cannot move her position, having been forced into it by other Departments—no doubt by Ministers in her Department as well as the Treasury. It seems pointless to ask the House to vote on the amendments, but it remains as my swan-song to this Bill that the Minister has proved to be a deep disappointment.

Mr. Deputy Speaker: Is the hon. Lady asking leave to withdraw the amendment?

Mrs. Gillan: indicated assent.

Mr. Deputy Speaker: It would have been helpful if she had said so.

Amendment, by leave, withdrawn.

Order for Third Reading read.

Mrs. Roche: I beg to move, That the Bill be now read the Third time.
It has given me great pleasure to have the honour to pilot the Bill through the House of Commons. As I have said all along, the Bill is a long-overdue measure—[Interruption.] I am sorry that the hon. Member for Christchurch (Mr. Chope), who is to assume a position on


the shadow Trade and Industry team, should laugh at the Bill, which has been warmly welcomed by small businesses. It does not bode well for his shadow ministerial career; however, I look forward to welcoming him to his new responsibilities at Trade and Industry questions, when he might be in a better frame of mind.
The Bill is a long-overdue measure to tackle late payment and the genuine harm that it does to small businesses. It is fair to say that small businesses are the lifeblood of the economy. I am happy to be able to provide to our small firms a statutory mechanism that they have wanted for a long time. Some in the House and elsewhere have wondered whether small businesses will be willing to use that mechanism and take up their new right when it becomes available. A recent survey by the Midland bank found that 79 per cent. of businesses support the legislation, and 77 per cent. of small businesses would use it. It is welcome that small businesses are looking forward to the legislation being passed.
The Bill will recompense creditors who are kept from their money through no fault of their own. It will move the uncertainty regarding cash flow that is usually faced by those who are paid late to those who pay late. The issue of uncertainty is important, and I share the view of the Forum of Private Business that the legislation provides uncertainty for the late payer of the debt. That uncertainty manifests itself in three ways. First, there is the possibility of late payers having to provide a contingent liability in their balance sheets. Secondly, late payers risk facing a demand for statutory interest from receivers of their former late-paid suppliers. Thirdly, those who are paid late will be able to claim statutory interest from notoriously late payers when they retire, or are no longer trading with them.
As a consequence, businesses will see that, should they pay late, they may be pursued by the creditor, a factoring company, or a debt collection agency that has been assigned that debt; and that that pursuit may take place at any point within the six-year statute of limitation, or other period in Scotland. That is a good reason to pay on time. I am sure that accountants in firms that habitually pay late would rather pay on time than carry such contingent liabilities financial year to financial year.
As I have stated all along, the Bill provides small businesses and, in the not-too-distant future, all businesses the opportunity to exercise a new right in the fight against late payment. However, the Bill in itself is only one plank of the Government's efforts in that respect. The Government are committed to continuing work in direct partnership with businesses and their representative organisations. We want to ensure, through the provision of quality information and support, that businesses can improve their credit management. We shall also ensure that Government Departments understand that they are to lead by example. That is why Departments will be required to pay within 30 days or as otherwise agreed and why we are committed to publishing payment timetables.
I pay tribute to my noble Friend Lord Clinton-Davis for his efforts in piloting the Bill through another place; and to all my right hon. and hon. Friends who on Second Reading and in Committee so ably assisted the passage of the legislation.
I take this opportunity also to thank all the business representative organisations that provided an input during the Bill's progress. I thank Stan Mendham of the Forum of Private Business, whose unflagging dedication has been evident to all, certainly to the House.
The Bill's time has come. It will be warmly welcomed by the business community, particularly small businesses, which are the backbone of our economy. I commend it to the House.

Mr. Page: Despite the Minister's brave words just now, as the Bill made progress in Committee, we could see dawning on her face the appreciation that the Bill was slipping into the category of "It seemed a good idea at the time".
The weaknesses of the measure became more and more apparent and we could see why all but one of the small firms' organisations said no to the statutory right of interest. The one that said yes was the smallest and the noisiest. My right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) exposed on Second Reading why that organisation concluded that the Bill would be a good thing: the survey was carried out in such a way that the answer could only be yes, yes and yes. When those small firms realise that they will still have to go to court and plough through legislation, there will be a group of disillusioned small business men and women.
The Minister has behaved in a courteous and friendly fashion. Courtesy is not universally noted among the Ministers in the Department of Trade and Industry, but she is a pleasant exception. She has loyally plodded on, but she has dodged a number of questions. I do not blame her for doing so. If I were in her shoes and I were being asked those questions, I, too, would dodge them. However, even at this last stage, those questions should be put to her again.
Conservative Members asked about the methods for calculating the interest rate above the base rate. Having read clause 6, we were left with the image of the Secretary of State with a wet towel around her head, drinking black coffee and doing abstruse calculations to make sure that they picked the right figure. When we asked to see those calculations and the basis on which they were made, there was nothing—not a sausage. We discovered that the draft European Union directive being debated happened to use the figure of 8 per cent. above the base rate as the measure. That could well be a coincidence, and I would be prepared to accept that if we could see the calculations that led to that figure, which exactly matches that in the draft EU directive. That is a coincidence too far.
The Minister has dodged the request by my hon. Friend the Member for Chesham and Amersham (Mrs. Gillan), who has so ably led us in the proceedings on the Bill, for examples of how the Bill's success will be measured. Not a single idea has been put forward to explain how we will examine whether the measure has been a success. Of course, examples will be produced to show how company A took company B through the process and obtained a statutory right of interest. Apart from the fact that there will be a little more interest, that could, and would, have happened under the existing system.
I should be interested to see whether the Forum of Private Business, which has so valiantly championed the cause for a number of years, will be prepared in three or


four years to survey its members to discover whether they feel that the statutory right of interest has been of benefit to them. It should leave aside the fast-track procedures when they are eventually decided by the Lord Chancellor and the extra rate of interest and let them give an accurate answer to the question whether the statutory right of interest has been of advantage to them. I have a strong feeling that the boxes towards the insignificant end will be given most attention.
The Minister dodged the fact, which was covered in an amendment tabled in Committee by my right hon. Friend the Member for Bromley and Chislehurst, that the Scottish Parliament will be able to amend the legislation. It is worrying that, on each side of Hadrian's wall, legislation may be interpreted and operated differently. That is not the way to maintain a united kingdom. Does Labour want a united kingdom?
The Minister dodged the question why the Government should not give a lead. She gave some reasons for the Government's view, but they do not add up. The Government should lead by example. They should not cower behind and come in at the last possible stage. The Minister dodged two or three times the question of what the Government will do if perceived unfair terms and conditions are imposed by a dominant purchaser or supplier. There has not been a whisper from the Government about what they will do in such circumstances. The Minister will not have to dodge such questions for much longer, because the Bill is in its final stage.
The Minister used some fine words about the break point of 50 employees, but the reason for choosing 50 is peculiar, and the calculation that led to it is not clearly understood by all hon. Members, not least by me. Why will she not adopt the European draft directive which, in the case quoted, uses the sum of 20,000 euros as the basis for court action or for operating a statutory right to interest? That is a matter for the future.
We all agree that the Bill will regularise credit terms. However, even the Minister is starting to accept that it will not be surprising if credit terms for small businesses lengthen rather than shorten. All that the Bill tries to achieve could have been achieved by a better fast-track procedure in the small claims court, which is what has been promised. The Lord Chancellor is working on that, but he is rather like Dr. Who, because now and again he goes into the Tardis and comes out reborn and reinvigorated. The latest one popped out on 1 May and has promised that there will be a better fast-track procedure in the small claims court. That is the best way to help small firms to collect outstanding debts.
The Bill is unnecessary. Guidance could be given to a court on the amount to be charged over baseline interest, and the court could be told that it should be higher than the current 3 per cent. In time, small firms will realise that they still have to go through procedures and go to court and that the companies that they are pressing for late payment have a right of reply. The 77 per cent. of companies that say, "This is what we want, this is right and we support it," will rapidly dwindle to a much smaller percentage.
The Minister made an inaccurate statement, I am sure inadvertently, to my hon. Friend the Member for Chesham and Amersham. She chided my hon. Friend for a memory lapse, but I remind the Minister that the previous

Government got all parties in the small business sector to sit down together. The previous Prime Minister launched at 10 Downing street "Your Business Matters". The list of attendees—I have been writing them down—is impressive. Apart from representatives of all the small firm organisations, the Governor of the Bank of England, the Chancellor of the Exchequer, the President of the Board of Trade, representatives of the four clearing banks, several senior civil service officials and even the Minister for Small Business, Industry and Energy were there. After that, regional meetings were held throughout the country and a final meeting took place at the Queen Elizabeth II conference centre, where many measures to help small businesses in the payment sector were brought forward. I remind the Minister that this unity is not exclusive to her and to her Government. I was glad that all sectors of the business community combined to try to tackle the serious aspect of late payment.
What will go through today pales into insignificance against what has happened over the previous few years. What is being done to make Government set an example in payment on time is absolutely correct. Making large firms state payment policy and payment practice in their accounts is a positive move in the right direction. The endorsement of the prompt payment CBI code was again the right move. The British standard on payment policy has real teeth, the only real teeth that I can see. If a company that has signed up to the British standard does not pay on time, trading standards officers can go in. Apart from training through business links, on which I know the hon. Lady is working—I am glad that she is—the other matter on which the previous Government should be commended is the removal of the iniquitous pay-when-paid system. Many small businesses and subcontractors welcome the passing of such an iniquitous operation. That is a roll-call of honour of which every Conservative Member can be proud.
To sum up the Bill, I can do no better than quote one of the four clearing banks. When asked for its views, it said, "This won't work, but it might help to change the culture." Let us hope that it does, because this is a very expensive and tedious method of achieving very little.

Mr. Cotter: I welcome the Bill and congratulate the Government on introducing it. Unlike my Opposition colleagues, I believe that, in the round, the uncertainty of late debt should be reversed following the Bill and that the culprits of the crippling problem of debt will find the boot on the other foot; so I congratulate the Government and, at the same time, hope that they have taken on board various points that have been made by me and colleagues nearby.
The American writer Dorothy Parker once said that the two most beautiful words in the English language were "cheque enclosed". We hope that that will be heard much more in future. The statement will have a powerful and, I hope, true meaning when the Bill is implemented. Many businesses will have the right to break free from the late payment millstone which has hung around their necks and, in many cases, ruined their businesses. Small businesses in particular depend on tight budgeting to realise investment and to advance their projects. The Bill will help to create a better payment culture, providing a stick as well as a carrot.
Over the next few years, it will be exciting to see how the Bill progresses. In that connection, I welcome the Minister's commitment to monitoring and to accepting the need for the Government to produce annual reports on their record.
I am concerned about some local authorities. Many of them have clear guidelines and procedures for payment. Bradford council has a computer system that is programmed as a matter of policy to pay bills on time automatically. I hope that others will follow that example.
Concerns have been expressed by the Forum of Private Business. Discussions have been held in the past few days on the problem of parties sidestepping or avoiding paying interest as a result of subsequent actions. I understand that that has been considered carefully and that the Minister is satisfied that the issue will be covered. I hope so.
I should not like to conclude without referring to the hon. Member for Chesham and Amersham (Mrs. Gillan), who has taken a strident part in the debate. I wish her much success in her new role. There was a worrying moment in Committee when she referred to fish being used for payment. I had an awful vision of fish being overdue and being dead and rather smelly. I was concerned about what state the fish would be in when it came to the two fish required to provide the interest.

Mrs. Gillan: Tinned fish.

Mr. Cotter: Tinned fish may be more acceptable. The hon. Lady threw fresh light on the expression COD—cash on delivery. I wish her well in the future. I also thank the Minister for ably conducting these proceedings and for courageously pushing ahead with the Bill, which I warmly welcome on behalf of the Liberal Democrats. I believe that it will provide a solution for small businesses, which has been long overdue.

Mr. Forth: I am almost as worried about legislation by survey as I am about legislation by referendum. As my hon. Friend the Member for South-West Hertfordshire (Mr. Page) said, it depends on the question that is asked. If people are asked, "Do you want a better life? Would you like life to be more pleasant? Would you like the Government or legislation to relieve you of your problems?" the odds are that they will say yes. According to the Minister, many bodies that claim to be representative have tended to say yes to these simplistic questions. I doubt whether their response would be the same if they were asked, "If penal rates of interest were to be introduced for late payments, would you like dominant purchasers to renegotiate their contract with you such that the payments would be even later than they already are?"
As ever, the answer depends on the question. Whether we are dealing with legislation by referendum or legislation as a result of a survey, the danger is that we may mislead innocent people into believing that a legislative wand can be waved over their problem to make it disappear. By asking the wrong question, we are likely to get the wrong answer and to legislate in the wrong way, resulting in disillusionment.
We have tried over and again to persuade the Minister of this danger, but she has not yet been persuaded. I suspect that we are unlikely to do so at this stage of the

legislative process. I have this dream that she will rise at the end of Third Reading and seek to withdraw the Bill, but that is unlikely. The Government should take much more care, because they are increasingly resorting to the seductive technique of survey or referendum. They ask simplistic questions and receive, unsurprisingly, positive answers. They then cite that as proof positive that the legislation has widespread support and will therefore succeed.
I will not try to emulate the analysis offered by my hon. Friend the Member for South-West Hertfordshire of how this impractical legislation is supposed to take effect. We have already heard this evening undertakings to the effect that public bodies will make payments of invoices within 30 days. I doubt whether anyone, public or private, has the mechanisms to guarantee that. How many organisations of any size, public or private, have in place the procedures to enable them to pay at that speed? The danger, then, is that—without a renegotiation of terms of trade—nearly everyone will become liable to the penalties specified in the Bill.
Herein lies the danger: we are threatening to penalise people for acting in a perfectly normal and respectable way. That means running the risk that a number of businesses will seek to renegotiate their terms with their suppliers to avoid the penalties introduced by the Bill. That, in turn, will mean even later payments than are the norm now. I sincerely hope that that backlash will not follow enactment of the Bill; I fear that it may, however.

Mr. Page: My right hon. Friend is powerfully putting the point that no company can run a monthly credit system for each individual article purchased during the month. To do so would wipe out the whole purpose of a monthly account.

Mr. Forth: I agree, of course: my hon. Friend understands how business works. Regrettably, all too few of those involved in drawing up the Bill share his understanding. It is impossible to imagine businesses completing each and every invoice as an individual item, with no cut-off point, standard procedure, or mechanism of the kind that any efficient business must have.
My hon. Friend and I both know—it would seem that no one in the Government does—that the assumptions underlying the Bill are quite impractical and will ultimately lead to the destruction of its aims.
For reasons not yet satisfactorily explained—very little about the Bill has been—we are asked to accept that Government Departments will be treated much more leniently than the private sector; there is also an arbitrary cut-off point for numbers of employees. That, too, will lead to anomalies in the implementation of the legislation. We have made that point time and again and received but scant explanation in reply.
There has been little understanding—uncharacteristically—by the Minister. We are left at this late stage of the Bill's progress with a large number of unanswered questions which are germane to the purposes and effects of the measure. Because those questions have not been answered, doubts must have been sown in the minds of those involved in business—large or small, representative or practicing—who must by now be extremely concerned lest the Bill prove to be counter-productive.
Far from protecting the interests of small businesses, this legislation could harm businesses in general, and possibly small businesses more than most. It would be tragic if that were to be the outcome of the Bill's passing into law.
I give these warnings not with a sense of joy but with a sense of foreboding. I hope that I am proved wrong, but I fear that if the Government persist in basing legislation on answers to fatuous questions asked in superficial surveys, this is the kind of legislation that will result. If, during the legislation's passage through this House and the other place, we do not receive satisfactory answers from Ministers, perhaps it is because we are failing in our purpose—perhaps we have not kept the Minister here long enough, grilling and questioning her, or perhaps we have not tabled sufficient amendments, probing and substantive. If that is the case, we may have learnt our lesson this time, and perhaps next time we shall be much more rigorous in our approach. In any event, there are lessons to be learned by all of us.
I hope that, even at this late stage, we may have got the Minister to think rather more carefully about the approach that she and her Department will take to legislation, and that the lessons learned from this Bill are not borne by the very businesses that it was designed to help.

Mrs. Gillan: We have certainly had an interesting Third Reading debate, and I have no intention of repeating the excellent points made by right hon. and hon. Friends.
I make it clear at the outset that there is no difference between Conservatives and the Government in so far as we do not support the late payment of debt. However, the Minister has not justified the legislation or even thought it through sufficiently. I think that she latched on to what she thought was a good idea to validate her new business-friendly credentials and pursued legislation that she herself has admitted was not supported by 60 per cent. of the organisations representing small businesses. Indeed, just before the Government came to power, I believe that the current Prime Minister received a letter from the Confederation of British Industry, the Institute of Directors, the Association of British Chambers of Commerce and the Federation of Small Businesses outlining their opposition to the measure.
During the Bill's passage, the Minister has failed even to refer to the remedies introduced by the previous Government in an attempt to change the culture of late payment. Instead, she has sought to gain notoriety from legislating, rather than putting in a sustained effort. In short, she has manoeuvred the legislation to provide excess protection for her friends in other Departments.
I do not know whether you, Mr. Deputy Speaker, or the Minister are familiar with the Anglo-Irish poet Jonathan Swift who, in 1709, wrote:
Laws are like cobwebs, which may catch small flies,
but let wasps and hornets break through.
However, during the Bill's passage, the Minister has certainly taken Swift to heart by allowing the Government, or the hornets and wasps, to remain a protected contractor for four years, while condemning the

small flies—businesses with 50 or more employees—to the wilderness, without the protection of this legislation to fall back on when they deal with the public sector.
It was a Conservative Government who started the publication of Government Departments' payment records. Although the Minister tried to make cheap points in Committee, it was under a Conservative Government that improvements in the timeliness of payment by the Government were evidenced. Just as the minimum wage was not set during the passage of the National Minimum Wage Bill, thus hampering discussion on that Bill, the results of payment records under the present Government were not made available to the House to enable us to judge the progress that they have made. How much better it would have been if those records had been available and if the Minister could have persuaded her colleagues to guarantee timely payment to all suppliers, thus leading by example.
It does not surprise me that the records were not made available. The responsibility of the Government is to govern and, in those terms, we do not seem to have a Government at all. When they are not delegating to others—for example, decisions on interest rates or the level of the minimum wage—they are pretending to be sympathetic to everyone and saying that they will carry out a review. Many of those reviews have been outstanding for more than 12 months.
In this case, however, the Government decided to govern. They promised to establish interest on late payments. What do we find? They have tabled amendments to their own Bill at every stage. We have to be sceptical about the effects of this convoluted legislation, which is hardly likely to be understood by the small companies that are to benefit. So much was admitted by the Minister, who will be sending out explanatory leaflets, but we did not expect the Government to have second, third and fourth thoughts about their own measure.
We are not confident that the Bill will produce the benefits that the Minister claims, but of course we hope that it does not cause the damage that we have outlined and for which there is so much potential. The House will appreciate that if one payment period is extended, the Minister will have failed.
The Conservative party believes in supporting small businesses, so we shall not oppose the Bill at this stage. In summary, the Government make a lot of sympathetic noises towarfds businesses, but continue to heap greater burdens on them. Businesses already face a tax bill of more than £25 billion during the lifetime of the Government. In addition, they have to contend with the minimum wage, the working time directive, union recognition, paternity leave, works councils, the introduction of the euro and the fact that manufacturing industry is now officially in recession. Like a leopard, the Government never change their spots.
It is with great pleasure that I hand over the mantle for this brief to my hon. Friend the Member for Christchurch (Mr. Chope). I am sure that he will continue to argue, as I do, that all Labour Governments are bad for business.

Question put and agreed to.

Bill accordingly read the Third time, and passed, with amendments.

BUSINESS OF THE HOUSE

Ordered,
That, at the sitting on Thursday 4th June, the Speaker shall put the Questions necessary to dispose of proceedings on the Motions in the name of Mrs. Ann Taylor relating to Modernisation of the House of Commons not later than Ten o'clock and such Questions shall include the Questions on any Amendments selected by the Speaker which may then be moved.—[Mr. Betts.]

EUROPEAN COMMUNITY DOCUMENTS

Motion made, and Question put forthwith, pursuant to Standing Order No. 119(9) (European Standing Committees),

FISHERIES MONITORING UNDER THE COMMON FISHERIES POLICY

That this House takes note of European Community Document No. 6123/98, a Commission Communication on Fisheries monitoring under the Common Fisheries Policy; also notes that the Communication builds on an undertaking given by the Commission to the Prime Minister at the Amsterdam European Council in June 1997; and endorses action being taken by the Government to secure more effective and consistent standards of enforcement across the Community.— [Mr. Betts.]

Question agreed to.

HUMAN RIGHTS BILL [LORDS] (PROGRAMME)

Resolved,
That the following provisions shall apply to proceedings on the Human Rights Bill [Lords].

Committee of the whole House

1. (1) The remaining proceedings in Committee of the whole House shall be completed in four allotted days and shall, if not previously concluded, be brought to a conclusion six and a half hours after the commencement of proceedings on the Bill on the fourth of those days.

(2) On each such allotted day, paragraph (1) of Standing Order No. 15 (Exempted business) shall apply to proceedings on the Bill for any part of the period of six and a half hours after the commencement of proceedings on the Bill which falls after Ten o'clock.

Business Committee

2. Standing Order No. 82 (Business Committee) shall apply to proceedings on the Bill.

3. No Motion shall be made to alter the order in which proceedings on consideration of the Bill are taken, but the resolutions of the Business Committee may include alterations in that order.

Conclusion of proceedings

4. For the purpose of concluding any proceedings which are to be brought to a conclusion at a time appointed by or under this Order:—

(1) The Chairman shall forthwith put the following Questions (but no others):—

(a) any Question already proposed from the Chair;
(b) any Question necessary to bring to a decision a Question so proposed;
(c) the Question on any amendment moved or Motion made by a Minister of the Crown;
(d) any other Question necessary for the disposal of the business to be concluded.

(2) Proceedings under sub-paragraph (1) shall not be interrupted under any Standing Order relating to sittings of the House and may be decided though opposed, at any hour.

(3) If two or more Questions would fall to be put under sub-paragraph (1)(c) on amendments moved on Motions made by a Minister of the Crown, or under sub-paragraph (1)(d) in relation to successive provisions of the Bill, the Chairman shall instead put a single question in relation to those amendments, Motions or provisions.

(4) On a Motion made for a new Clause or a new Schedule, the Chairman shall put only the Question that the Clause or Schedule be added to the Bill.

(5) If on an allotted day a Motion for the adjournment of the House under Standing Order No. 24 (Adjournment on specific and important matter that should have urgent consideration) stands over from an earlier day or to Seven o'clock—

(a) the bringing to a conclusion of any proceedings on the Bill which under this Order are to be brought to a conclusion after that time shall be postponed for a period equal to the duration of the proceedings on the Motion, and
(b) paragraph (1) of Standing Order No. 15 (Exempted business) shall apply to proceedings on the Bill for the period after Ten o'clock for which sub-paragraph (a) permits them to continue.

Supplementary

5. If a Motion is made by a Minister of the Crown to amend this Order and if an effect of the Motion would be to provide a greater amount of time for proceedings on the Bill, the Question on that Motion shall be put forthwith and may be decided, though opposed, at any hour.

6. If a Motion is made by a Minister of the Crown to supplement the provisions of this Order in respect of further proceedings on the Bill, the Motion may be proceeded with, though opposed, at any hour and proceedings on the Motion, if not previously concluded, shall be brought to a conclusion three-quarters of an hour after they have been commenced.

Interpretation

7. In this Order "allotted day" means any day on which the Bill is put down on the main business as first Government Order of the Day.—[Mr. Betts.]

Strathclyde Police (Racism)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Betts.]

Ms Sandra Osborne: I welcome the opportunity to represent my constituent, Mr. Lawrence Ramadas. I also believe that the issues that I am about to raise have wider significance in relation to the race relations policy of Strathclyde police and the message that the general public can take from the case.
Thirteen years ago, Lawrence Ramadas joined Strathclyde police and was proud to be a police officer. He believed that he had a great future with the police. His ambition was to join the traffic department, but, despite passing sergeant and inspector promotion exams within four years of becoming a police constable, producing consistently good results in his annual appraisals and continually applying for positions, the extremely promising young officer was never transferred off the beat despite applying six times to the traffic department.
Lawrence Ramadas is a personable, intelligent and articulate young man who would be a credit to any force, but instead, 13 years after joining the police, he is homeless, jobless, virtually broke and his health has suffered. At one point, Mr. Ramadas lost his self-respect, but he has certainly gained my respect and that of many others in his tireless quest for justice.
On 11 February 1997, an industrial tribunal found that Lawrence Ramadas had been subjected to one of the worst forms of discrimination. He was discriminated against by Strathclyde police—and by Superintendent Gordon Macpherson in particular—because of the colour of his skin.
Many people may believe that if Strathclyde police were serious about their much-vaunted race relations policy and determined not to tolerate racism in the ranks, they would have apologised to Mr. Ramadas immediately and compensated him for his trauma and for the destruction of every facet of his life. Instead, Strathclyde police appealed and lost. Their lawyers applied almost immediately to overturn the ruling on the technicality that the claim was brought after the legal deadline.
Racism cannot be confined to individual acts. It is a process whioh leaves victims disabled, disempowered and vulnerable. That is not well understood in the tribunal or police procedures. I ask the Minister to consider the time bar. It is not easy to determine when an episode of racism began or ended.
A few weeks ago, the tribunal ruled
with a considerable amount of regret
that the time bar ruling applied and that no compensation could be awarded to Lawrence Ramadas. It added that the treatment meted out to Lawrence Ramadas was
extremely serious with devastating effects
and "an abuse of power". It concluded:
It is frustrating for the tribunal to be unable to compensate him adequately.
Those on the tribunal could hardly have been more damning in their condemnation or have expressed their views more clearly. That there had been racism was established without doubt.
Alas, the almost gloating reaction of the chief constable of Strathclyde, as reported in The Scotsman on 10 April, was:
By virtue of the tribunal's adjudication upholding the time bar argument, the force has averted any award of damages from the police budget impacting on front-line service to the public.
That statement constitutes blatant and institutional racism. It is an insulting response which almost beggars belief. Strathclyde police remain guilty of racism, but managed to avoid recompensing a man whose life they have ruined because of a technicality—and they believe that they should be congratulated for so doing.
The chief constable pontificates that he will not tolerate racism, while in the same breath condoning proven racism, the tackling of which figures low in his priorities given his comments about saving public money. I wonder how much public money the police have spent to date on defending the indefensible.
After the findings of the first tribunal, the deputy chief constable, Mr. Richardson, announced that he had commissioned an independent inquiry into a breach of police discipline regulations. On Wednesday 26 February, Mr. Ramadas was interviewed by the investigating officer of the inquiry—Assistant Chief Constable MacKay—in the presence of his solicitor. At the outset, he was informed by Assistant Chief Constable MacKay that his sole remit was to investigate breaches of the police discipline regulations and that it had nothing to do with the industrial tribunal. I concur with that view.
However, Mr. Richardson deferred making a decision on possible disciplinary proceedings until the outcome of the employment tribunal was known, in spite of the police inquiry's recommendation that there was a case to answer. Mr. Richardson seems to want to have it both ways.
Surely the police discipline code and industrial tribunal legislation are quite separate entities under the law. The fact that Lawrence Ramadas has sought recourse to justice from an industrial tribunal surely does not absolve Strathclyde police of their responsibility as employers. In this case, however, Strathclyde police appear to have shirked their responsibility to make a decision on the independent report that they commissioned, and it appears that the decision whether to proceed with a discipline case is dependent on the outcome of an employment appeals tribunal.
Such a course of action cannot be correct or justified, and, in practice, means that the progress or otherwise of a discipline case is, de facto, being decided by an employment appeals tribunal. What if the employment appeals tribunal had decided that racist discrimination had not occurred? After some considerable time, would Strathclyde police have also decided that there was no case to answer? It is not surprising that Lawrence Ramadas believes that, by continually deferring a decision on the independent report, Strathclyde police were hoping that the whole sad episode would simply go away or be quietly forgotten, and that the perpetrator of the abuse would remain in a highly paid job and retire on a substantial pension, while the victim of his abuse is jobless, homeless and almost penniless, and cannot get another job the moment that he explains why he left the police service.
After various false starts, a date has been set for a disciplinary hearing. Apparently, the hearing was set for 4 February 1998, but was delayed until April at the


request of the perpetrator's solicitor, who has sought a judicial review, challenging the competence of the chief constable to raise disciplinary proceedings. That has meant, of course, that the whole process has again ground to a halt, and it may be September before a disciplinary hearing is heard—depending on the result of the judicial review. The Tayside report recommending action was published in May 1997.
I have here a copy of Strathclyde police race relations policy. According to the chief constable, it is written with a view to dealing with racially motivated incidents that breach the criminal, not the civil, law. In other words, if the racially motivated incident is in-house, it will not be brought to public attention. If that is so, can any officer subject a colleague to racism with impunity because it is a civil and not a criminal offence?
The Lawrence Ramadas case is a clear example that the system is not working. It neither reflects an understanding of the structural causes of racism nor demonstrates a coherent practice based on sound equal opportunities policies for dealing with it. Nor is it equitable in giving access to witnesses and documentation—both of which were denied my constituent's solicitor. I therefore call on the Minister to initiate an investigation, outwith the police authorities, on the handling of the case, to consider where procedures can be improved and to ensure that justice prevails for Lawrence Ramadas. He seeks an acknowledgement of guilt, an apology and compensation for loss of earnings after 12 years' service in the police, damage to health, homelessness and the hurt, distress and trauma caused by the horrendous process.
I am not alone in my belief that the outcome to date has been unsatisfactory. I shall quote Mr. James Wylie, who was until recently office manager of the Scottish Police Federation in Glasgow and formerly a police officer for 30 years:
I have worked for the Police for the last 39 years and generally thought highly of the service and the way in which it was run. This case has almost completely destroyed my faith in the service (at least at a senior level) and I would earnestly reiterate that some form of independent inquiry should be set up to examine the actions of Strathclyde Police senior management in this case. Surely someone, somewhere must be able to make Mr. Orr and his force accountable and responsible for the racism perpetrated against Lawrence Ramadas or does justice grind to a halt at the entry doors of Police Headquarters in Pitt Street?
A petition is circulating in Scotland calling for compensation and a resolution to this case.
Lawrence Ramadas was a model police officer and an example to others. It may interest the House to know that there is still an appalling lack of representation from the ethnic minority community as far as police recruitment is concerned. In 1996, Scotland's eight forces had 40 ethnic minority recruits, only two of whom have been promoted to sergeant. Of 9,187 workers in the Strathclyde force, 33 officers and 17 support staff come from ethnic minority communities.
The race relations policy of the force states:
Recruitment of police and force support personnel from black and ethnic minority communities will continue to be a priority of Strathclyde Police, which, as an employer, seeks to create a harmonious and productive working environment by adhering to a well-established and continuously reviewed equal opportunities policy.

This did not work for Mr. Ramadas.
Mr. Ramadas was a model police officer and an example to others. On numerous occasions, he was paraded for the cameras and the press as an example of the positive measures Strathclyde police were taking to tackle racism and to recruit more officers from ethnic minority communities. However, Lawrence Ramadas now has no job. He had no equity and he had no justice. Strathclyde police have won an Investors in People award. Mr. Ramadas is not impressed by that award.
Strathclyde police, as a public service, represent the state and, in particular, the upholding of the law as part of the criminal justice process. They also have a duty to uphold a moral and civil message that racism is not acceptable. I look forward to my hon. Friend the Minister's comments, and I urge him to look at the situation as a matter of urgency.

The Minister for Home Affairs and Devolution, Scottish Office (Mr. Henry McLeish): I congratulate my hon. Friend the Member for Ayr (Ms Osborne) on her success in securing this debate and on the manner in which she has outlined her case. The House will, I am sure, agree that racism should have no place in the Scotland of today, least of all in the police. We must value the unique contribution made to our society by each individual, regardless of background, race or creed. Any incident with a racist element—wherever or whenever it happens—is a matter for deep regret, and we must do everything in our power to prevent such incidents from occurring. When they do occur, any alleged wrong must be confronted and firm action taken.
The incident concerning my hon. Friend's constituent, Mr. Lawrence Ramadas, took place almost six years ago. The industrial tribunal that considered his case did not suggest that the force as a whole was racist; its conclusion related to the actions of one officer, Superintendent Gordon Macpherson, for whom the force was held responsible.
As soon as the tribunal announced its decision in February 1997, the deputy chief constable commissioned an independent inquiry by Mr. James MacKay, assistant chief constable of Tayside police. I hope that my hon. Friend will agree that such prompt action does not suggest any complacency on behalf of the force.
Strathclyde police also decided to appeal against the tribunal's decision, on legal advice, on the basis that given the complexity and length of the evidence presented over 12 days, the industrial tribunal's reasoning did not, in the force's view, support its conclusions. Mr. MacKay's report was completed in May 1997, but no action was taken pending the appeal.
The appeal was rejected in December 1997. Following the outcome of the appeal—and in the light of the recommendations in Mr. MacKay's report—Strathclyde police initiated disciplinary proceedings against Superintendent Macpherson in December 1997, with a hearing being scheduled for February 1998. At that point, however, Superintendent Macpherson began legal proceedings in the Court of Session to prevent the hearing. A judicial review of the deputy chief constable's decision to pursue disciplinary proceedings against Superintendent Macpherson is to be heard in July.
Subject to the outcome of the judicial review, Strathclyde police have made a provisional arrangement for the disciplinary hearing to take place in September. The deputy chief constable of Strathclyde police has arranged for Queen's Counsel to present the case against Superintendent Macpherson, and the chairman of the disciplinary hearing will be the chief constable of Lothian and Borders police, Mr. Roy Cameron.
As the incident took place several years ago, the discipline case will be taken under the Police (Discipline) (Scotland) Regulations 1967, as amended—the procedure which was current at the time. It will be for the disciplinary hearing under Mr. Cameron to determine whether Superintendent Macpherson was guilty of an offence under the 1967 Regulations. A variety of punishments, ranging from caution to dismissal from the force, may be imposed. The procedure includes a right of appeal to the Secretary of State against the finding and against any punishment imposed as a result of the outcome of the disciplinary hearing. I regret that, in the circumstances, I cannot comment further on the case—to do so could prejudice the role of the Secretary of State in any appeal.
Although I understand my hon. Friend's frustration, I do not think that it would be fair to blame Strathclyde police for the fact that the case has been so protracted. It is important that the proper procedures are followed. I am satisfied that current police disciplinary and conduct arrangements in Scotland are working. A major review of the complaints and discipline system in Scotland was conducted in 1996, resulting in new conduct regulations. The new regulations provide more flexibility in the way in which misconduct by officers can be dealt with and increase the range of disposals available. I am, of course, aware of the recent Home Affairs Committee report on police disciplinary and complaints procedures in England and Wales. I shall consider, in consultation with the police, whether any of its recommendations that we have not already covered need to be introduced in Scotland. My hon. Friend makes a valid point in saying that we should carefully consider any ways in which we can improve procedures.
Having referred to the case of Mr. Ramadas and explained why I cannot comment more fully in the light of the proposed disciplinary hearing, I shall set out in more general terms the approach of the Scottish police service to ensure fair treatment and opportunities for all its officers. I hope that I shall be able to demonstrate to my hon. Friend's satisfaction that significant strides have been taken in the past five years.
I assure my hon. Friend that the police in Scotland are very conscious of their responsibility to avoid racism within the service and to promote equal opportunities. In 1993, Her Majesty's inspectorate of constabulary carried out an inspection of equal opportunities in the Scottish police. The report of the inspection concluded that all forces were taking the issue of equal opportunities very seriously. The inspectorate continues to examine equal opportunities during its regular inspections of police forces. The most recent report on Strathclyde police, which was published only last year, found that the force upheld its commitment to promote equal opportunities throughout its internal procedures.
In 1987, Strathclyde police launched their race relations policy, which was aimed at enhancing the already good relations between black and ethnic communities and the

force. In July of last year, the chief constable of Strathclyde police published an updated race relations policy. Work on the revised policy took nearly a year to complete; it took account of a number of points of good practice that had been raised by local black and ethnic community representatives, and included consultation with police forces south of the border.
The policy mainly concerned the force's relations with the public. However, it also confirmed the force's commitment to equal opportunities for all its staff. That makes it clear that Strathclyde police are committed to equality in employment and service. Freedom from harassment or victimisation on racial grounds is an important part of the policy. All officers in Strathclyde police are expected to demonstrate their commitment to those equal opportunity principles in their relations with their colleagues at every level. In addition to that strengthened commitment, the force re-emphasised the importance of its programme of racial awareness training for its officers.
Strathclyde police's race relations policy states clearly that the force is opposed to racism. As my hon. Friend said, that is right, and I reinforce her comments. It goes on to say that the force will prepare its officers to provide a quality service to ethnic minority communities. The force records and monitors reports of racially motivated attacks to ensure that they are investigated thoroughly. Strathclyde police are committed to working with ethnic minorities to develop a mutual understanding of concerns. The force seeks to inform minority communities of its commitment to equality of service and encourages them to seek the assistance of the police with confidence. The police also undertake to enhance community safety. Progress in ensuring equality of service is monitored at the highest level in the force, and action will be taken to resolve any difficulties that emerge.
In 1996–97, 206 racial incidents were reported to Strathclyde police; in 1997–98, the number rose alarmingly to 481, an increase of 233 per cent. I believe that, in large part, that reflects the public's increased confidence in the reinforced procedures that the force has adopted.
I do not think that those figures reflect a force that is prepared to tolerate racism in its ranks. To do so would hardly be consistent with the force's overall aim of delivering the highest possible standards of service to the people of Strathclyde. More generally, the force places great emphasis on the quality of its personnel policies. As my hon. Friend said, Strathclyde police force received the prestigious Investors in People award, and was the first police force in Britain to do so.
Strathclyde, like all Scottish forces, is keen for its officers to be drawn from all sections of society and has taken steps to encourage applications to join the force from members of ethnic minorities. In 1994, it was one of the first forces in Britain to develop and implement a strategic framework for action aimed at increasing the number of black and ethnic minority recruits. Specifically, the framework for action provided a target to increase the number of officers from black and ethnic backgrounds from 0.2 to 0.5 per cent. of its strength over a five-year period. By the end of 1996–97, the number of ethnic minority officers in Strathclyde stood at just under 0.5 per cent., with another two years to achieve its five-year target.
All applicants from ethnic minorities are allowed to sit the entrance test for appointment to the force. Access courses are provided at further education colleges to help ethnic minority candidates to prepare for their application to sit the standard entrance test. The innovative policy implemented by Strathclyde police was recognised by the Commission for Racial Equality and was commented on in the 1996 report on race and equal opportunities in the police service.
Overall, the Scottish police service has a good record in policy and practice on equal opportunities, although, as my hon. Friend says, that is never a matter for complacency. If there can be an improvement in the quality of service given to the community—and, indeed, in internal procedures in the service—that must always be a high priority for the chief constable.
In the Scottish police service, training in racial awareness is provided for all new recruits at the Scottish police college at Tulliallan. It continues both at the college and in forces as officers progress to the senior ranks. Race relations policies are increasingly being developed in consultation with local racial equality councils. Forces also cover race relations policy in their community safety strategies, and throughout Scotland there are various examples of good practice.
I reiterate my and the Government's view that racism cannot be tolerated in the police or elsewhere in society. Strathclyde's chief constable and his seven colleagues in Scotland share that view. While it is impossible to be sure that isolated incidents will never take place, I believe that the Scottish police have made substantial efforts to develop a culture that minimises racial discrimination.
The Government believe that Scotland benefits from being a multicultural society and that we should cherish our ethnic diversity. The Government have a clear commitment to racial equality and to taking steps to ensure that it is at the heart of Government policy.
We do not underestimate for one minute the problems that racism poses for society, and we are taking steps to address it. One of those steps is the action that we are taking to combat racist crime. The Crime and Disorder Bill, which is in Committee in this House, will introduce a new offence of racially aggravated harassment. It will also require the courts, when sentencing an offender who has committed a racially aggravated crime, to treat that racial aggravation as an aggravating factor when deciding on sentence.
Those measures were decided on following consultation involving many organisations representing victims and possible victims of racist crimes. The measures will improve the protection of the public and reinforce the right of all people in Scotland to live a life free from crime. They will address all levels of racist crimes. In every case where a racist element is proved, the courts must take that into consideration when sentencing. It is important that everyone—victim, police, public and offender—is left in no doubt that racist crimes are wholly unacceptable in Scotland and that perpetrators will be dealt with accordingly.
The Government have given their finn commitment to a fair and just society in which all individuals, whatever their race or ethnic origin, have equal rights. Racial discrimination is manifestly harmful and unjust to its victims and to Britain as a whole. The Government are fully committed to eliminating racial discrimination, whether in the police service or anywhere else.
My hon. Friend will understand my inability to go into further detail about the personal case she has raised, but I wanted to extend my discourse to show that we deplore racism, which is an abhorrence in our society and I repeat that, whether it be in the police or in society, this Government want to stamp it out.

Question put and agreed to.

Adjourned accordingly at twenty minutes past Twelve midnight.